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Nevada Decides to Implement Medicaid Expansion

Nevada has become the first state helmed by a Republican governor to announce an opt-in to the Medicaid expansion up to 138% of the poverty level (it’s really 133%, but there’s a 5% “disregard” that brings it up to 138% in practical terms). Based on numbers from the Kaiser Family Foundation and the Urban Institute, this means that 136,563 low-income Nevadans will become eligible for coverage under Medicaid, at a low cost to the state government, because the feds will pick up all the of expansion costs for the first three years and 90% thereafter.

In the near run, this will likely provide a savings for Nevada, because it will limit costs associated with the uninsured.

The federal government will pay 100 percent of the medical costs for the expansion for the first three years — resulting in $712 million in federal funding coming to Nevada. The state, however, must share in the cost to administer the program. And in four years, Nevada will begin footing the bill for a portion of the medical costs as well.

“That’s a massive leverage of federal dollars,” Sandoval’s budget director Jeff Mohlenkamp said. “Considering how much federal dollars we are leveraging, the cost (of expansion) is fairly small.”

The decision to opt into the Medicaid expansion will actually cost the state’s struggling general fund less than if Sandoval had rejected the expansion.

Because the Affordable Care Act mandates individuals to carry health insurance, officials expect nearly 70,000 low-income Nevadans who are already eligible for Medicaid to enroll in the program. That will cost the state $84 million.

By expanding Medicaid — to cover another 78,000 Nevadans — the state will be able to move some indigent mental health and substance abuse patients off state-funded programs and into the federally funded Medicaid, saving close to $17 million. That means the total expansion will cost the state $67 million.

Those are the raw numbers, but there’s also a moral obligation to help those in need. And stakeholders really wanted the expansion, for a new set of customers that they would otherwise have to pay for in emergency room costs. And there are economic benefits to the state for expanding Medicaid and generally presenting a healthy environment for its citizens. All of this combined to get Sandoval on board for the expansion. He also promised to add an insurance exchange for Nevada.

There are still dozens of GOP governors who have either rejected the Medicaid expansion outright or have yet to decide, and most of them do not come from states carried twice by President Obama, like Nevada. So it’s still a long climb. But this is a small victory.

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David Dayen

David Dayen