Medicaid costs escalate in state

Nevada's Medicaid caseload is not growing as rapidly as expected, meaning the $1 billion-plus program should stay in the black this year.

The state welfare program also finds itself in good shape, with the number of people receiving cash assistance well below what was projected by lawmakers in 2003.

But there's bad news too: the rising cost of providing medical care under Medicaid, a state and federally shared program for the elderly, disabled.

Though some welfare recipients qualify for Medicaid coverage, care for the aged and disabled populations is pushing program costs higher, said Charles Duarte, administrator of the Division of Health Care Financing and Policy, which oversees the Medicaid program.

Welfare recipients make up 54 percent of Medicaid's caseload but consume only 20 percent of the cost of care, Duarte said.

The Medicaid budget could increase by 30 percent to $2.6 billion for the coming two years if the request submitted by agency officials is fully funded by Gov. Kenny Guinn. The program is running about $2 billion in this two-year budget.

Guinn is completing his two-year spending plan for release to the Legislature on Jan. 24.

Medicaid is one of the single largest state-funded budgets. Only the education budgets take a bigger piece of the pie.

The agency-recommended Medicaid budget includes federally mandated increases in fees paid to some medical providers, plus optional fee increases proposed by the Department of Human Resources for others.

Guinn can choose other enhancements to include or leave out in his budget.

Guinn already has said some fee increases to providers are one of his budget priorities.

A big share of the Medicaid program is paid for by the federal government. But if the budget as submitted by the agency is accepted by Guinn, state general fund spending on Medicaid would increase from $630 million in the current 2003-05 two-year budget to $885 million in the 2005-07 period, a 40 percent increase.

Mike Willden, director of the Department of Human Resources, said the budget request may seem high, but much of the added general fund spending is for caseload increases and mandatory rate increases to medical providers.

Nevada's Medicaid program is not a rich one, he said.

"Nevada has a long ways to go in health care to meet any kind of national average," Willden said. "We were last in the nation in per capital spending in the 2003 Legislature. If we doubled our spending, we would pass only two states."

Sen. Bob Beers, R-Las Vegas, a member of the Finance Committee, was critical of the size of the Medicaid budget and its projected caseloads in the 2003 session when he was in the Assembly.

"The statistics show we have a far richer Medicaid system per beneficiary than surrounding states," he said. "We have added optional Medicaid programs that other states have not."

Beers says he's not surprised the Medicaid and welfare caseloads are lower than projected in 2003. The caseloads had been declining for several months before the projections were finalized, he said.

"It makes sense to me that if our unemployment is low, poverty will be low on a per capita basis," Beers noted.

One factor at play in Nevada's Medicaid program may be the growing number of retirees who move here after paying taxes in other states, he said.

"They have not been paying into our Medicaid system," Beers said. "There may be some inequity there."

Duarte said Nevada's Medicaid program has some optional services, but they typically offset costs that would be incurred elsewhere.

Nevada's Medicaid program is not overly rich compared to other states, he said.

One measure, the number of people covered compared to the total population, places Nevada low on the list, Duarte said. Nevada covers about 8 percent of its population, while the average is about 11 percent, he said.

Medicaid costs take up only about 13 percent of Nevada's general fund budget, well below the state average cited by the National Governors Association.

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Information from: Las Vegas Review-Journal, http://www.lvrj.com