LINCOLN — Savings produced by the federal health care law could more than pay for extending Medicaid to thousands of low-income Nebraskans, according to a key lawmaker.
State Sen. Jeremy Nordquist of Omaha released an analysis of potential costs and savings for the expansion Wednesday.
He did so as a group of state lawmakers introduced a bill to expand Medicaid coverage as allowed under the federal health care overhaul.
Legislative Bill 577 sets up a clash with Gov. Dave Heineman, who adamantly opposes the proposed expansion.
Sen. Kathy Campbell of Lincoln, chairwoman of the Health and Human Services Committee, said Nebraskans have a tradition of looking out for one another.
The bill fits with that tradition while taking advantage of provisions in the federal law.
"This is an opportunity to make a smart investment in our state's economy and workforce," she said. "A healthy workforce depends on access to health care."
The bill would extend health coverage to an estimated 54,000 low-income adults as part of the federal health care law.
Those who would be covered under the bill include people without minor children who cannot qualify for Medicaid now.
Also covered would be people with children and disabled adults who make too much to qualify for Medicaid under current income limits.
Campbell introduced the bill with 11 co-sponsors: Omaha Sens. Brad Ashford, Ernie Chambers, Tanya Cook, Sue Crawford, Sara Howard, Rick Kolowski, Bob Krist, Heath Mello and Nordquist, along with Lincoln Sens. Danielle Conrad and Amanda McGill.
Krist said the expansion would bring federal taxes paid by Nebraskans back to the state to benefit its citizens. But he said the issue is about more than money.
"This is a human question," he said. "This is the right thing to do."
The governor's spokeswoman, Sue Roush, said Wednesday that Heineman did not have a comment about the bill.
The governor has repeatedly argued that Nebraska cannot afford the Medicaid expansion without raising taxes or cutting state spending on education.
But Nordquist presented information showing that the expansion, along with other provisions in the federal law, would produce net savings for the state.
The changes would allow Nebraska to reduce state spending on mental health and substance abuse services, a state-funded disability program, prison health care and some smaller programs.
Nordquist said the money saved would offset the additional costs of the Medicaid expansion through fiscal year 2019-20.
But he offered LB 578 to ensure the costs were covered. The bill takes insurance premium taxes that have been used to subsidize the state's high risk health insurance pool and puts the money toward the Medicaid expansion.
The pool will not be needed once the federal law takes effect because insurance companies will no longer be able to refuse to cover people with pre-existing health problems.
Heineman's budget proposal put those premium tax dollars into school aid and the state general fund.
Nordquist used cost figures from a new study by Milliman Inc., an independent actuarial and consulting firm hired by state Medicaid officials.
The study, dated Jan. 8, estimated that the expansion would cost from $148 million to $204 million over seven years, depending on how many people enrolled in the program. Milliman said the higher participation figure is unlikely.
The study showed $60 million in savings from the disability program. The Milliman study did not consider potential savings in other state programs.
Federal funds will pay 100 percent of the costs for the expansion from 2014 through 2016, declining to 90 percent of the cost by 2020.
The federal health care overhaul will make health insurance available to people making federal poverty level incomes or more, starting in 2014.
The law envisioned an expansion of Medicaid to cover more low-income people, but a U.S. Supreme Court ruling in June made the expansion optional for states.
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