Nevada faces uncertain future under health care ruling

From the halls of the state Capitol to medical offices in Nevada, Thursday's U.S. Supreme Court ruling upholding President Barack Obama's health care overhaul drew mixed yet strong reaction.

But behind the politicking and punditry that followed the decision cementing the constitutionality of the Affordable Care Act, officials and health care providers were left to decipher the opinion and calculate the impact on the state's budget and the delivery of health care.

A key part of the Supreme Court's decision struck down a requirement that states expand Medicaid coverage or lose federal funding for the program. That decision essentially gave states the choice of opting into the federal expansion and covering more residents, but at a cost.

"The implications for Medicaid costs are still unclear, but Nevada will prepare to meet the serious implications of this decision," Gov. Brian Sandoval said in an early morning statement. "I believe that Congress should act to reform this law and ease the serious burdens it places on the states and the nation's businesses."

Sandoval said the impact of the court's decision on Nevada's Medicaid program was not immediately clear, though he was leaning toward not opting into the expanded program.

"The governor does not intend to auto­matically accept the Medicaid expansion," his press secretary, Mary-Sarah Kinner, said in a separate statement Thursday afternoon.

The Supreme Court ruled 7-2 that the federal government could not withhold Medicaid funds from states that don't expand their programs, which provide free health care for the poor, blind, disabled and some of the elderly.

More than 308,000 Nevadans receive their health care through Medicaid. Because of the insurance mandate, Sandoval's office projects another 49,000 eligible residents to enroll at a cost of $60 million in the next two-year budget. Nevada's Children's Health Insurance Program is expected to add 20,000 un­insured children who are already eligible even without expansion, adding another $11 million in costs, according to the governor's office.

The federal health care law also expands Medicaid eligibility for adults between 19 and 64 and other groups, which could add an estimated 72,000 new people to the program by 2015. Some of the "significant administrative costs" from that expansion will be covered by the federal government for the first three years, with states sharing a to-be-determined portion of costs after that.

State legislators on both sides of the aisle shared Sandoval's worries about paying for expanded Medicaid coverage in the current economic climate.

"I don't know whether we can do it now," said Assemblyman Pat Hickey, R-Reno, the potential Republican leader in the Assembly.

Rather than increase Medicaid spending, Hickey wants to reduce it by requiring $20 or $30 co-pays of recipients when they visit doctor's offices.

Assemblywoman April Mastroluca, D-Henderson, expects Nevada and many other cash-strapped states to forgo expanding their Medicaid programs because of the costs.

"I don't think it would be in our best interests to expand right now," added Mastro­luca, chairwoman of the Assembly Health and Human Service Committee.

The state's inability to increase the Medicaid caseload means thousands of poor people who would otherwise have had free health care will have to buy insurance, she said.

Other lawmakers said it was too soon to rule out expansion.

"I don't know how anyone can make that decision now," Assembly Majority Leader Marcus Conklin, D-Las Vegas, said. "We need to really understand what it means and what are our other options, if any."

Before writing off expanding Medi­caid, state Sen. Mo Denis, D-Las Vegas, said legislators need to sit down with the governor and discuss it.

"The other part of this decision is millions of people will get medical coverage they don't have now. We need to figure out what we can do with Medicaid," added Denis, the presumptive state Senate Democratic leader.

At an afternoon news conference in Washington, D.C., U.S. Sen. Harry Reid, D-Nev., essentially warned governors to think twice before opting out of the Medi­caid expansion.

"Every governor in this country who is part of the plan will sit and make their state a better state," Reid, the Senate majority leader said. "And I think those governors that are now saying some things, that if they continue along this vein, they'll wish they hadn't because they will not have the ability to help their constituents like those states that have it."

U.S. Rep. Joe Heck, R-Nev., welcomed the court's decision to give states the option of expanding without risking their current Medicaid funding.

"Certainly it is important that we figure out ways to get more people covered, and if it means utilizing safety net services, that is a decision the state has to make," he said.

Heck, a doctor, said the situation under­scored the need to give states flexibility, perhaps by making Medicaid a block grant program, "so the states can use those dollars in ways they think is best for their population to cover the most people."

Geoff Lawrence, deputy director of policy for the conservative Nevada Policy Research Institute in Las Vegas, said he's not surprised the governor and legislators are hesitant to support expanding Medicaid.

"Congress' entire intent in structuring the Affordable Care Act was if you expand Medicaid, you could force states to pick up a portion of the costs, and states don't have the money to do it," Lawrence said.

If Nevada expands Medicaid, it would have to cut funding for education or police and fire programs, Lawrence said. He estimates Medicaid expansion will cost the state $5.4 billion more over 10 years.

But Bob Fulkerson, the state director of the Progressive Leadership Alliance of Nevada, said if Nevada doesn't expand Medicaid to include more people living close to poverty, these people will go to hospital emergency rooms.

"It will cost us anyway," he said. "You don't provide health care for sick people and they go to emergency rooms. Are we going to fight for health care, or are we going to let people get sick and die?"

Fulkerson said the federal government will pay most of the expansion costs for at least three years.

He estimated Nevada's costs at $40 million a year. "Forty million a year is a good day of mining in Nevada," said Fulkerson, whose organization has been fighting for years to increase the mining tax.

He called the $575 million and $5.4 billion costs being thrown around "highly exaggerated."

IMPACT ON NEVADA

Mark Hutchison, the Las Vegas lawyer who represented Nevada for free in its challenge of the Affordable Care Act, said he believes the portion of the ruling that gives states the option not to expand their Medicaid rolls will have a "huge impact" in Nevada.

"Nevada would have had the highest increase (in Medicaid case rolls). Medi­caid is supposed to be a cooperative program with the federal government and states cannot be coerced into expanding their programs."

Hutchison said he was surprised that the court, particularly Chief Justice John Roberts, upheld the mandate requiring uninsured people to purchase insurance. Starting in 2014, they must pay a penalty that begins at a minimum of $95 a year on their income taxes if they fail to buy health insurance.

But Roberts said the amount of tax they pay can be no more than 60 percent of the average cost of insurance.

"This raises taxes on a lot of people who can't qualify for Medicaid, including a lot of people who are pretty poor," he said.

Because of the Supreme Court's decision, the state's Silver State Health Insurance Exchange applied for a $50 million federal grant Thursday to continue its startup efforts.

Starting in October 2013, the state agency will provide residents who must buy insurance the names of carriers and the specific insurance plans they offer.

Residents also will be able to estimate what they would pay for insurance and how much of a federal subsidy they would receive.

They could comparison shop for the best deals.

Jon Hager, executive director of the exchange, said if residents decide to take the primary "silver" plan, 70 percent of their health care costs would be subsidized. He estimated 134,000 of the state's 557,000 uninsured people would secure insurance in 2014, and by 2016 almost all would be insured.

Hager could not give specific figures that people, some earning less than $15,000 a year, would have to pay. What is "affordable" to some people is not to others, he said.

"It will be more affordable than it is today," Hager said.

During a February meeting of his board, analysts said someone earning $15,000 a year would pay $54 a month for insurance, while someone with a $20,000 income would pay $114 a month.

Hager said those figures might be revised by the time the startup date approaches and depends on the plan the person chooses.

MEDICAL COMMUNITY REACTS

Representatives of Southern Nevada's medical community also were trying to divine what the court's decision might mean.

Larry Matheis, executive director of the Nevada State Medical Association, said the ruling could open the floodgates to patients who have put off medical care because they haven't been able to afford it.

"I think the dam breaks loose sometime in 2014," he said.

The public, meanwhile, is apt to suffer the consequences of a "sudden mass" of new people seeking health care in a state that doesn't have the medical workforce to meet the current demand, he said.

"We're now getting to that critical point, and just at a time we're increasing the availability of coverage, we may find that, in fact, there's not enough access to that coverage to make the benefit really worthwhile," he said.

Dr. Thomas Schwenk, dean of the University of Nevada School of Medicine, said American health care is destined to "change dramatically."

Under our current model, "a patient comes to a doctor, and the doctor does anything he or she wants to do, and the patient says, 'Fine,' and we don't ever look at the quality or the value of whether that was really a good decision," Schwenk said.

"As long as that system continued, the system was going to become un­affordable and unsustainable, and I think employers and, certainly, the govern­ment were starting to stumble onto that fact."

Dr. Mitchell Forman, dean of Touro University Nevada College of Osteopathic Medicine, called the individual provisions of the law "very good."

But the law's requirement that all Americans obtain health insurance burdens individuals who are the most vulnerable - those with the least amount of income to pay for health care, he said.

Some may receive help via subsidies from Medicaid or a state plan.

But even a small financial hit can be difficult for some families to bear, Forman said.

At University Medical Center, CEO Brian Brannman said having more patients covered under Medicaid would help the public hospital provide better patient care.

About 30 percent of UMC's patients are on Medicaid. About 25 percent of emergency room patients are classified as "self-pay," while another roughly 20 percent is made up of people who may qualify for Medicaid or similar programs, he said.

Having more patients with insurance would help the hospital provide better preventive care and reduce overall costs, he said.

For example, UMC sees patients with health issues who "wait until the last minute to show up in the emergency department," he said. "That's the most in­effective, expensive way to deliver care."

Not every physician supports the law. Dr. Richard Chudacoff, who specializes in obstetrics and gynecology, led a 2009 physicians march on Washington, D.C., to protest it.

Physicians are "going to basically lose control of our ability to control our lives," he said.

For both doctors and patients, the legislation represents "the loss of personal freedom," Chudacoff said.

Chudacoff also opposes the law on financial grounds.

"Is there money to pay for all of this extra health care? Are Medicaid and Medicare solvent? No," he said. "So do you think adding 50 million people to Medicare and Medicaid-type situations is going to decrease the financial burden?"

Dr. Frank Anderson, director of obstetrics at Nevada Health Centers, a clinic that caters primarily to the poor and uninsured, said the high court decision moves health care in the right direction.

However, he is concerned about how quality of care will be affected by the increase in newly insured patients seeking care.

"Is it a good idea? Yes," Anderson said of the ruling. "Does it need to happen? Yes. But the concern is the level of support you get on the other end."

Review-Journal reporters Ben Frederickson and Kyle Potter contributed to this report. Contact reporter Brian Haynes at bhaynes@reviewjournal.com or 702-383-0281. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901. Contact John Przybys at jprzybys@reviewjournal.com or 702-383-0280.