Proposal shifts costs to cash-strapped NV state gov’t, forcing tax increase or health care benefit cuts for 100,000+ Nevadans

April 7, 2011

Washington, D.C. – Nevada Senator Harry Reid today discussed a new report showing that on top of ending Medicare, the budget released this week by House Budget Committee Chairman Paul Ryan (R-WI) would cut $6.9 billion in federal Medicaid funding for Nevada.  By shifting this enormous financial burden to the state, Carson City would either have to raise taxes to make up for the shortfall or dramatically slash health care benefits for at least 136,000 Nevadans, including seniors, families and nursing home residents.  This radical proposal comes as the number of seniors in Nevada is expected to skyrocket from 12.3 percent to 18.6 percent over the next two decades.

“This extreme Republican budget proposal has its priorities upside down -- protecting tax breaks for billionaires and government giveaways for oil companies at the expense of middle-class Nevadans struggling to pay the bills and put food on the table,” said Reid.  “Not only does this reckless proposal dismantle Medicare, but it slashes health care for more than 130,000 Nevadans.  We need to cut wasteful spending and excess such as taxpayer subsidies for corporations that ship American jobs overseas, not the benefits that Nevada’s seniors, families and nursing home residents rely on.”

Specifically, the extreme GOP budget plan would:

• Force at least 136,000 Nevadans off Medicaid;
• Shift the burden of providing up to $6.9 billion in health benefits to Nevadans to the state, which already faces an enormous budget crisis;
• Reduce federal investment in Medicaid, meaning any increases in enrollment and health care costs would have to be covered by the state.

A recent article illustrates the consequences of Medicaid funding reductions:  3/23/11: Las Vegas Review-Journal: Proposed aid cuts could shutter five nursing homes Below is the full report on how the extreme GOP budget plan would cut benefits for Nevada.

IN NEVADA, GOP PLAN COULD CUT UP TO $6.9 BILLION FROM HEALTH CARE, NURSING HOME BENEFITS FOR RESIDENTS

The Republican budget ends Medicare as we know it - and their plan to cut $1.4 trillion in health care services through Medicaid would put an end to vital services that seniors depend on like nursing home care and home health aides. If Republicans get their way, Nevada residents would lose $6.9 billion in health benefits, and 136,563 could see their coverage cut entirely.

GOP Plan Could Force At Least 136,563 Nevada Residents Off Medicaid. Medicaid currently provides health coverage to roughly 263,600 Nevada residents, with the federal government picking up 50.2% of Nevada’s Medicaid costs. At a minimum, the Ryan Plan could remove at least 136,563 Nevada residents from the program. [Kaiser Commission on Medicaid, 2/2011; Kaiser Commission on Medicaid, 5/2010; Kaiser State Health Facts, accessed on 4/1/2011]

Block Grant System Could Shift Cost to State Government, Slashing Health Benefits in Nevada By Up to $6.9 Billion When the State Already Faces a Budget Crisis. House Budget Chairman Paul Ryan’s proposal could slash $6.9 billion in health benefits from Nevada over the next ten years, including $2.9 billion in federal investments and $4 billion to expand eligibility in the state. Nevada is already facing a $1.5 billion budget shortfall in Fiscal Year 2012, and a block grant system would force the state and local governments to either slash benefits or raise taxes to cover the shortfall. [Congressional Budget Office, 11/17/10; Center on Budget and Policy Priorities, 3/9/11; Kaiser State Health Facts, accessed 4/5/11]

Nevada Would Receive Far Less Federal Investment Than Other States Under Republican Block Grant Plan. Nevada Medicaid expenditure levels are relatively low ($4,586 per enrollee) compared to the US average ($5,153 per enrollee). Because the block grant funding levels are based on current state Medicaid spending, Nevada would receive less block grant funding than other states. Under the Republican block grant proposal, Nevada would likely have to cover unanticipated cost increases resulting from increases in enrollment or health care costs. [Kaiser State Health Facts, accessed on 3/29/2011]

Elderly Population in Nevada is Expected to Skyrocket from 12.3% to 18.6% by 2030. In Nevada, 61,900 seniors and people with disabilities rely on Medicaid to get the health care services they need. In 2030, 18.6% of the total population of Nevada is expected to be 65 years old or older, up from 12.3% in 2010. For aging and elderly populations, Medicaid covers services that other programs, including Medicare, do not cover, like nursing home care. The Ryan plan would require larger and larger Medicaid cuts over time, just as more seniors require Medicaid and health care costs continue to rise. [U.S. Census Bureau, State Interim Population Projections by Age and Sex: 2004 – 2030; Kaiser Commission on Medicaid, 2/2011]

FLASHBACK: Under ’95 Block Grant Plan, Nevada Would Have Faced $68 Million Cut to Health Benefits in the First Year Alone. In 1995, House Republicans proposed a Medicaid block grant plan similar to the plans offered today. If the 1995 block grant plan had become law, Nevada would have received $68 million less in federal health benefits – a 15% cut – in just the first year of the new system. [Lambrew, 1/26/05]

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