Gibbons allocates funds for health care planning

CARSON CITY -- Despite his objections to the national health care reform law, Gov. Jim Gibbons joined Attorney General Catherine Cortez Masto on Tuesday in agreeing to spend $279,119 in state money to set up a planning unit to prepare for 150,000 additional Medicaid recipients in 2014.

"I fundamentally disagree with the federal legislation that caused this need, but the law is the law," Gibbons said.

But the governor warned at Tuesday's state Board of Examiners meeting that this is just the first in a series of bills Nevada taxpayers will be forced to pay for mandates approved by Congress and President Barack Obama.

One state official said the next bill will be an unknown amount to create or join a high-risk insurance pool for Nevadans who are unable to obtain insurance coverage.

Then as much as $38 million for computer upgrades to handle the additional work.

Then an unknown amount to hire workers to handle the significant expansion of the federal health care program for low-income people.

And then the big hit: an estimated $575 million in benefits for the first five years of the expansion starting in 2014.

The costs come at a bad time for state government, which is in the middle of the worst economic downturn since the Great Depression.

Gibbons and legislators six weeks ago were forced to cut state spending by more than $800 million because of declining tax revenue.

Funding for national health care planning was an unanticipated expenditure, but there was enough in the state's contingency fund to pay the first $279,119 bill.

Although Gibbons agreed to the allocation, he is still fighting the federal mandate. After Masto refused his request to challenge the constitutionality of the health care law last week, he issued an executive order to retain Las Vegas lawyer Mark Hutchison to join a multi-state challenge to the law. Hutchison is working for free.

Gibbons said Nevada will have to pay unknown "millions of dollars" just to prepare for the health care overhaul law unless courts rule it is not constitutional.

"We will have to create a large bureaucracy to deal with it," Gibbons said. "Nevada needs to be there to defend the citizens of Nevada."

While most of the health care law will not go into effect for four years, state Health and Human Services Director Mike Willden said Nevada must start now to prepare for its effects.

He said 260,000 residents now receive free health care through Medicaid, and that total will increase by another 150,000 under provisions of the new law.

Medicaid is a federal-state program to provide health care to low- and no-income individuals and families. About 40 million people nationally received Medicaid in 2008.

"Our (current) system cannot handle that growth," Willden said at the meeting.

Nevada now provides Medicaid only to families with children who earn no more than 100 percent of the federal poverty limit, now $22,050 a year for a family of four.

Under the health care law, people without children will become eligible for Medicaid, and their incomes can be as much as 133 percent of the poverty limit, now about $15,000 for one person.

Tuesday's action frees Willden to hire a staff and a consultant who will evaluate how much money and how many additional workers will be needed to handle the increase in health care recipients.

Gibbons serves as chairman of the Board of Examiners, and Masto and Secretary of State Ross Miller are members. Miller was absent Tuesday.

Masto and Gibbons, who repeatedly have clashed on the lawsuit question over the past month, shared no small talk before the meeting but behaved professionally with each other in discussing the national health care law.

Willden said that 525,000 Nevada residents do not have health care and that all must acquire some type of health care policy by 2014 through Medicaid, their employers or private insurance exchanges.

The federal government will pay 100 percent of the new enrollee Medicaid health care costs for three years, but states then must start contributing a share of costs, Willden said.

He estimated Nevada will be on the hook for $575 million in the first five years after the health care law goes into effect.

Willden said the governor also must decide by the end of April whether Nevada will operate a high-risk pool for people who now cannot acquire health care insurance, or join with 14 states that now have such pools.

In response to Masto's questions, Willden said uninsured people now receive health care by going to hospital emergency rooms.

When they do not pay the bills, that cost is picked up by the hospital or through state programs covering indigent care.

"The hospitals eat a lot of the costs," said Willden, agreeing with Masto that taxpayers indirectly cover the costs of indigent health care.

Also on Tuesday, Gibbons said he has received "several checks" from people who have donated to a special fund he set up to cover costs of the lawsuit against national health care but did not know how much has been raised.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.