Policy Group Warns Of Ballooning Medicaid Budget

Nevada’s budget woes could grow worse as Medicaid costs continue to rise during the next decade.

That assertion comes from the Nevada Policy Research Institute, a free-market think tank that released a report today saying that rising Medicaid costs could eat into portions of the state’s budget currently apportioned for education.

“It’s almost like a national standard that we’re going to spend less on education and more on health care,” said Geoffrey Lawrence, NPRI’s deputy director of policy.

Lawrence, one of the authors of the report, said that President Obama’s Patient Protection and Affordable Care Act, sometimes called “Obamacare,” will lead to greater costs for Nevada.

The bill requires all states to lower the threshold for Medicaid eligibility by Jan. 1, 2014. Although the federal government helps pay for Medicaid, Nevada’s state government may eventually find more of the budget consumed by Medicaid costs.

“The cost to the state will be in the hundreds of millions,” said Chuck Duarte, administrator for the Division of Health Care Financing and Policy, which oversees the state’s Medicaid program.

Lawrence argues that the figure is likely billions of dollars. He said further population growth, more people using Medicaid and the chance that federal government aid could decrease in the future lead to a $5.4 billion burden between 2014 and 2023.

Duarte said his office estimates a $574 million cost to the state between the beginning of 2014 and the end of 2019. He said the differences could stem from the variables his office and NPRI have used to make their projections.

The report outlines a scenario in which Medicaid costs outstrip economic growth and tax collections, thereby eating more and more of the state budget.

Obama’s legislation does not affect the current proposed $6.1 billion budget, which covers the next two fiscal years between July, 2011 and July, 2013.

The next Legislature may have to contend with higher health care costs as they plan for the next budget.

Meanwhile, Nevada’s Department of Health and Human Services has established a health care reform task force to oversee implementation of the federal law.

The law also is winding through the court system, with several rulings expected next month. Nevada is a party to one lawsuit claiming the law is unconstitutional.