Cost Estimates Climb For Nebraska Medicaid

Partner content from Kaiser Health News

In the latest round of the health overhaul's "Showcase Showdown," the actuaries of Milliman, Inc., are projecting the federal law will cost the state of Nebraska between $526 and $766 million in unfunded Medicaid costs over the next 10 years, depending on how many folks actually sign up.

The report, commissioned by Republican Gov. Dave Heineman's administration, says the biggest expense would be the cost of paying medical claims for around 30,000 more Nebraskans.

Washington will pick up most of that cost, but the 10 percent that eventually falls to the state still measures in the hundreds of millions, according to Milliman's report. Other costs include new administrative expenses and changes to a drug rebate program.

As you may have guessed, the report's ultimate meaning is being refracted through red and blue lenses. In dueling statements, Nebraska's Republican senator, Mike Johanns said it details "the type of no-win decisions that the new health care law forces on our state," while Democratic Senator Ben Nelson argued "it actually illustrates how much of a burden health care costs are to Nebraska families."

Nelson, you may recall, won a deal for the state in the Senate version of the overhaul that would have diverted the full bill for expanding Medicaid to the federal government. But, that unpopular provision - derided as "the Cornhusker Kickback" - was stripped before the final bill cleared the House.

The same actuary, Milliman's Rob Damler, put together projections for Indiana, too. A May 6 letter says the state would likely spend an extra $3.6 billion over 10 years because of the overhaul.

An earlier memo between Indiana's health secretary and the staff of Gov. Mitch Daniels, a prominent critic of the health law and rising Republican star, suggested one overlooked provision affecting drug rebates could cost the state $400 million over that time.

Cindy Mann, the top federal official for the Medicaid program, told us in April that such estimates were overblown and assumed a worst-case scenario that forthcoming regulations would soften. But, when rules for the drug program became available, Milliman revised its estimate down to still-massive $298 million for the same provision.

Reached by phone, Damler said his firm was working on projections for other states, too. He cautioned that these estimates wouldn't translate readily to other places, though. Each state government has different rules for Medicaid. Nebraska, for instance, currently covers more parents in its Medicaid program than Indiana, so the impact of the overhaul will appear smaller.

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