Gibbons considers dropping Medicaid program

In the wake of a Heritage Foundation report reminding states Medicaid is a voluntary, not mandatory, program, Gov. Jim Gibbons has asked his Human Resources Department to analyze the impact of pulling out of it.

The Medicaid budget this biennium totals nearly $2.9 billion, some $870 million of it state money. But Deputy Chief of Staff Lynn Hettrick said opting out wouldn't save the state share unless Nevada tried to immediately cut everybody receiving services off.

"The reality is we wouldn't do that," he said. "If people had started services through (Medicaid) we would have to pick them up. That would not be mandated but, morally, we would not do that."

As a result, he said most of that $870 million would be spent providing those services and procedures the recipients are already qualified for as well as those in long-term care - primarily seniors.

"It's a long term issue because, in the short term, we'd pick up 100 percent of the expenses," he said.

He said over time, the cost would go down and the state would gain much more flexibility over how to provide services to those in need.

Those who lost Medicaid services, he said, would fall back on the federal subsidies for the uninsured which are part of the proposed health care reform bill nearing passage in Congress. If numerous states did the same, he said that would hit the federal government with a huge, unanticipated increase in costs.

Hettrick said no decision has been made because Health and Human Services Director Mike Willden and Charles Duarte who manages the Medicaid program haven't analyzed all the impacts.

He said he doubts it would ever actually happen because, if a number of states start looking at dropping Medicaid, the federal government "will close that loophole."

But he said the threat may help convince the government and Congress to fix some of the problems which are making it practically impossible for states to afford Medicaid.