“Though I have never liked the Affordable Care Act because of the individual mandate it places on citizens, the increased burden on businesses and concerns about access to health care, the law has been upheld by the Supreme Court,” Sandoval said in a written statement. “As such, I am forced to accept it as today’s reality and I have decided to expand Nevada’s Medicaid coverage.”
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.
However, this isn't the whole story. Remember that expanding Medicaid can actually save Nevada money. And Sandoval's people finally realized that.
“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.
Again, remember that the federal government pays all the medical costs for the first three years. And after that, Nevada will gradually be eased into paying for only 10% of the medical costs. So essentially, Nevada will only be footing a dime for a dollar's worth of health care!
And as we discussed before, by expanding Medicaid and fully implementing the Affordable Care Act, health care costs will fall for nearly all consumers. And economic activity will rise as a result of more investment in health care. So this truly is a win-win for everyone in Nevada.
And Governor Sandoval truly made the right choice this week.