Medicaid changes will be a major plus for Nebraska

Recent attacks on health care reform demonstrate that some of its most vocal critics understand neither its costs nor the value of making health insurance more affordable to Nebraskans.

The dispute over Medicaid illustrates the case.

Health reform will help more low-income working Nebraskans qualify for coverage through Medicaid. Medicaid has worked well since 1965, ensuring basic care for low-income people and sharing the cost between the state and federal governments.

The program has broad public support. A Time magazine poll from July indicated that 77 percent of American people support Medicaid spending.

By expanding the program to working Nebraskans making up to $14,400 for an individual and $29,300 for a family of four, a modest increase in cost is expected. For the first three years, that cost is fully paid for by the federal government, and over 10 years the federal government picks up 95 percent of the cost.

A report by the Kaiser Commission on Medicaid estimates that Nebraska’s cost for the expansion will be $155 million over six years. But a report released last week by Milliman Inc. says the cost will be between $387 million and $573 million over the same period.

Why the difference? The Milliman report overestimates the number of new people who will enroll in the program. In one calculation, it assumes enrollment nearly 50 percent greater than the historical rate Kaiser relies on. Milliman even assumes that all low-income workers with employer-provided coverage will drop it and switch to Medicaid.

The report also attributes no cost to the care that low-income people seek today but cannot pay for. These costs are shifted to the rest of us, a hidden tax that costs the average family $1,017 each year. Expanding coverage under Medicaid will offset these costs.

Additional cost savings in Medicaid are acknowledged in the report, and then simply omitted from the final calculation.

These and other faulty assumptions lead the Milliman report to a conclusion that is more reflective of political posturing than actuarial data. The report was commissioned by the State of Nebraska and comes while the state pursues a legal challenge against the new health care law. The same company is employed by other states also challenging health reform in court.

A more realistic outlook projects that Nebraska’s share of Medicaid spending will rise 1.5 percent to 2.2 percent and that about 100,000 more people will gain coverage. More than half of these families live in rural Nebraska, where incomes are lower and where more people go without insurance. Rather than being a burden, this is an opportunity to expand coverage, and it is an efficient use of state resources.

Critics not only distort the cost of the Medicaid expansion by several fold but also attribute no value to hundreds of millions in new tax credits for Nebraska farmers and ranchers, small businesses and individuals to help offset the cost of insurance. Asking Nebraskans to give up these new tax credits is simply a tax increase in disguise.

The new health care law will finally begin to control health care costs for individuals, the state and the federal government. Reform strengthens our national fiscal situation, reducing the federal budget deficit by more than $1 trillion over the next 20 years.

Without reform, insurance costs threatened to undermine the foundation of our economy. Another decade of increases like those seen in recent years would double or triple insurance premiums. Nebraska families cannot bear that, and the American economy cannot sustain it. Health reform begins to fix it.

So don’t be fooled by the flurry of misinformation about the new law. The same interests that opposed health reform when it was debated are responsible for these misleading claims.

Opponents of reform cannot change the fact that the new law puts into place reforms that will finally make insurance companies more accountable, guarantee all of us more choices and begin to bring the cost of health insurance for families, businesses and the government under control.

The writer, of Lyons, Neb., is assistant director of the Center for Rural Affairs.