House GOP budget avoids Medicaid 'biggest fears,' but 98K Nevadans may yet lose coverage

Proposed changes to Medicaid brought by House Republicans avoid a true doomsday scenario for Nevada's government and program enrollees in the state, but the imposition of work requirements would still likely lead to tens of thousands losing their health insurance.

Republicans are aiming to cut hundreds of billions of dollars in spending from Medicaid, the federal-state program that provides health coverage to low-income and disabled people, to pay for tax cuts in their budget bill. Medicaid covers about a quarter of all Nevadans, or 800,000 people.

The proposal that advanced out of the House Energy & Commerce Committee Wednesday did not include some of the most controversial ideas to shift more costs onto states that Republicans had discussed, including rolling back eligibility criteria that had vastly expanded Medicaid among low-income residents or imposing per-capita spending caps.

Nevada Medicaid Administrator Stacie Weeks told The Nevada Independent that the division is still reviewing details, but the program estimates that anywhere between 70,400 to 112,600 adult Nevadans enrolled in Medicaid today — between roughly 8 and 14 percent of the state's Medicaid population — could go uninsured because of new rules that would require people prove they are working or looking for a job to receive coverage.

She projected that the bill at this point in time would pose no major reductions in funding levels, which bodes well for the state budget.

"It is unclear yet what the U.S. Senate may want to add or change and what the final bill might look like," Weeks said. "At least at the start of this federal marathon, the outlook is less troubling for Nevada's state budget."

Another analysis from KFF estimated that the cuts could hit Nevada more severely than the nation overall. Using estimates from the Congressional Budget Office, KFF calculated that 13 percent of Nevadans — or 98,000 people — enrolled in Medicaid could lose coverage and the state would lose $590 million in federal funding over 10 years.

Weeks noted that the flip side of the work requirements and loss of people on insurance is that Nevada Medicaid will cost the state less money — early estimates show that Nevada Medicaid would spend between $441 million and $705.6 million less in state and federal expenditures over a biennium on Nevada Medicaid if these requirements were to go into effect. Weeks said the state's savings — from fewer enrollees and therefore less money that the state needs to match the federal spend — would likely range from $5.2 million to $8.4 million over the biennium.

Nevada health care consultant Mike Willden, who previously headed the state's Department of Health and Human Services, said that the state dodged a bullet with the omission of those controversial provisions. If some of those ideas had moved forward, Nevada would have seen billions of dollars worth of cuts and increased strain on a health care system already in critical condition.

"We've been at it for a decade, providing coverage to that [Medicaid expansion] population. So I think it would be very onerous to move back," Willden said, cautioning that the proposal is just a markup and is subject to "shift and change."

Fears around harsher cuts prompted a wave of advocacy and outreach from various health care industry groups, advocates and even Nevada's Republican Gov. Joe Lombardo, who warned in a February letter to Congress that cuts to the "safety net program" could have "serious consequences."

Rep. Mark Amodei (R-NV), Nevada's lone congressional Republican, said Tuesday that he was still going through the bill but thought it avoided some of the biggest concerns he's heard from hospital CEOs and state Medicaid personnel.

"I think all of their biggest fears for this — [that] people [would] close the doors sort of thing … I'm not done going through it, but so far so good," Amodei said.

The bill, which is projected to save more than $700 billion over 10 years through Medicaid cuts, could lead to 10.3 million people losing their coverage nationally, including 7.6 million who would wind up totally uninsured, according to estimates from the Congressional Budget Office. Medicaid is the program that Republicans are looking to generate the biggest savings as they try to offset $3.8 billion in tax cuts.

Republicans have maintained that the cuts are necessary to reduce waste, fraud and abuse in the program, while Democrats have accused Republicans of taking health care from the poor to pay for tax cuts — with many citing a report from The Center for American Progress, a liberal think tank, that estimates the bill would result in more than 650 Nevadans could end up dying avoidable deaths each year from their inability to afford care.

Sen. Jacky Rosen (D-NV) had a darker assessment of the bill, and what may happen to Nevadans who lose their Medicaid.

"People will die, and kids will die," she said.

What's in the bill

As part of a broader Republican mega-bill that includes the extension of the 2017 Trump tax cuts, new funding for border security and a host of other government spending cuts, the Medicaid spending cuts will first need to pass the whole House — no easy task — and could then be changed in the Senate.

Already, hard-line Republicans in the House have held the bill up to demand deeper cuts, while at least one GOP senator said he would not vote for the bill as written because the Medicaid cuts are too steep.

Under House Republicans' plan, states would be responsible for implementing work requirements. Able-bodied (a loosely defined term) Medicaid recipients between the ages of 19 and 64 without dependents will need to prove that they have been working, going to school or volunteering 80 hours per month for at least one month prior to their application or renewal.

If passed, that provision would kick in at the beginning of 2029.

When implemented in Arkansas and Georgia, work requirements contributed to significant drop-off in Medicaid enrollment. A KFF study found that more than 90 percent of Medicaid enrollees either met the work requirements or have a valid exemption, including a disability, pregnancy or caregiving responsibilities.

Even so, in the case of Arkansas, the bureaucracy around documenting work and exceptions — the same standard that the federal government is using — caused nearly a quarter of recipients to lose Medicaid coverage.

Chiquita Brooks-LaSure, the administrator of the Centers for Medicare and Medicaid under President Joe Biden, said she expects significant coverage loss if the Republican bill passes, especially among disabled people, despite the latter being exempted.

"For disability, you're often going through a process of continuing to prove it," Brooks-LaSure said in an interview. "There are many people who probably don't fall into the fully disabled category, but who are dependent on Medicaid."

Brooks-LaSure said people with substance abuse disorder may fall into that category, and could be at risk of losing coverage.

Nevada is one of 40 states that opted into Medicaid expansion through the Affordable Care Act — and was the first to do so under a Republican governor under then-Gov. Brian Sandoval in 2012. Medicaid expansion broadened eligibility for the program to include adults under 65 with incomes up to 138 percent of the federal poverty level — $21,597 for individuals, as of 2025.

After implementation, Nevada's uninsured rate dropped from 22 percent in 2012 to 12 percent in 2015. It also saw the largest percentage point decline in its rate of uninsured children, from 14.9 percent in 2013 to 7.6 percent in 2015. Weeks said that now, about 66 percent of Nevadans enrolled in Medicaid are employed and that for the first time ever, Nevada's state's uninsured rate dropped below 10 percent to 8 percent.

Willden said if the federal government had decided to roll back or limit Medicaid coverage for the expansion population, Nevada would likely see a cascading result of rising uninsured rates, a more stressed health care system and higher costs for hospitals and providers.

"I think people are on board in Nevada, regardless of your party, that it's the right thing to do to provide coverage to these folks," he said. "Governor Sandoval was the first Republican governor to opt in years ago, and congratulations to him, and congratulations to Lombardo — both Republicans taking the stance to, 'Hey, don't cut what's working.'"

Willden said he thinks the work requirements are less problematic than eliminating coverage altogether for the expansion population. He said there are similar requirements in place for other basic public assistance programs, such as food stamps. He said the work requirements would likely cause turnover in the Medicaid population but given that work requirements are already in place for other programs, the state will likely take those changes in stride.

Under the Republican bill, Nevadans in the expansion population who earn more than the federal poverty level could pay up to a $35 copay per service, when they currently have low or no cost sharing. And rather than an annual eligibility check, under the bill, states will need to verify eligibility twice a year — a process that typically contributes to churn on the Medicaid rolls.

There's still a lack of clarity surrounding how that copay would affect Nevada. Willden said state officials have experimented with copays in the past and it was difficult to implement. He added that copays could impose challenges for staff or discourage people from getting health care.

"[There will likely be] more eligibility work to see where you fit and whether you don't have a copay or do have a copay. And then people's income can fluctuate month to month," Willden said. "One of the questions I would have is, does the bureaucracy work, [is it worth] what you're going to get out of the $35 copay?"

Other parts of the bill had a mixed response.

One piece of the draft measure that Weeks said is welcome is a proposed increase in accountability measures around pharmacy benefits managers (PBMs) and spread pricing — a compensation model in which a PBM reimburses an in-network pharmacy for less than what the insurer pays to the PBM for a drug, pocketing the difference.

"We want more of this please," Weeks said of the efforts to rein in PBMs.

Weeks also said a requirement in the bill to reduce the time for back payment of medical bills after a Medicaid application is submitted from three months to one month will reduce the time that individuals will have to finalize their applications with Medicaid to ensure there are no coverage gaps.

Additionally, under the bill, people who are eligible for Medicaid but unable to enroll in the program because they do not meet the work requirements will also be prohibited from getting subsidized coverage on the Affordable Care Act marketplace, such as through Nevada Health Link.

The legislation also targets states that permit undocumented immigrants to enroll in Medicaid through the use of state-only funds by making them pay more. Nevada does not allow undocumented immigrants to qualify for Medicaid, so the federal match rate will remain at 90 percent.

"Nevada is not one of those states, so yahoo," Willden said. "If that had dropped to the 60 percent, it would have been billions."

Provider taxes

One lower-profile but still important pain point officials in the state have been worried about was the potential for changes to the state's so-called "provider tax."

These taxes are assessed on health care entities that opt in, and the money generated from the "tax" is then earmarked as part of the state's share of Medicaid payments. Many states use provider taxes as a way to cover part of their cost of the joint federal-state Medicaid program and help bring Medicaid payments to providers up to the average commercial rate.

In Nevada, hospitals and nursing facilities have opted into the program.

To put the program into context, Willden said without the provider tax in skilled nursing, facilities would be paid about $160 a day per patient. With the program and matched federal dollars, that payment increases to $275 — with the state still only paying $160 of it.

"That makes a huge difference," Willden said. "Study after study has shown that you can't do it at $160 but the state's not willing, or doesn't have the resources to increase something above $160 [without that program]."

When matched with federal Medicaid funding, the revenue from the hospital tax program is estimated to bring in about $800 million per calendar year, with the state leveraging a portion of the funding to overhaul Nevada's behavioral health system.

The House GOP proposal would freeze provider tax arrangements which means that Nevada's existing programs will remain in place but can't expand.

"The elimination of the provider tax disproportionately affects states like Nevada that have attempted to expand coverage and help more people receive the care they need, because we did the right thing back under Gov. [Brian] Sandoval," Rep. Steven Horsford (D-NV) said in an interview.

Weeks said that while the state will be able to maintain its current tax rate for hospitals, the draft bill proposes a new cap on what Nevada Medicaid can pay out in supplement payments to private hospitals — meaning over time it creates less reward for providers and makes the "voluntary" tax hospitals agreed to pay untenable over time.

"This reduces funding over time for children's behavioral health," Weeks said. "Hopefully, lawmakers will be able to address these concerns by adding an inflator or trend factor to allow some modest growth in these payments to address inflation."

Blayne Osborn, president of the Nevada Rural Hospital Partners, called the news of a freeze on the provider tax a relief, because hospitals in the Silver State would be grandfathered in under the proposal.

"It's bringing in an amazing amount of dollars that were otherwise going to other states," Osborn said. "Now they're coming to Nevada, we're getting a bigger portion of that federal funding back to the state, so that's huge and to just freeze it, where it is? We're OK with that."

Still, Osborn said rural hospitals, which have a large Medicaid patient base, have concerns about the bill even though there is more clarity than before.

"There's still going to be a lot more to this puzzle," Osborn said. "All things considered, it's a lot better to be with this bill as the starting point than where we were back in February."