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For the third year in a row, the Legislature debated a bill that proposed to expand Medicaid. Initiated by President Obama, the Affordable Care Act was signed into law on the federal level in 2010. Medicaid expansion was mandatory in the original legislation, but due to a Supreme Court ruling it became voluntary for states. LB 472 would authorize eligibility for Medicaid coverage for adults ages 19-65 with incomes at or below 133% of federal poverty level. This year’s version of the legislation also proposed to create the Medicaid Redesign task force to review health care policy.
Supporters of the legislation referred to a recent report by two business professors at UNK, which found that our state would receive more than $2 billion in federal funds during the first five years of expansion. It was estimated that this would increase our state’s economic activity by more than $5 billion. The professors projected that the increased economic activity would generate more than enough tax revenue to pay for the state’s portion of the increased costs of expansion. However, Governor Ricketts warned against using subjective measures in determining the justification for entitlement expansions.
Although the federal government pledged to pay at least 90% of the cost, many senators were still concerned with the financial burden that would be placed on our state. They also questioned whether the federal government would keep their commitment. Supporters pointed out that LB 472 contained language that if the federal share falls below 90%, the coverage for the newly eligible would terminate. Opponents argued that once a program is expanded, it is very difficult to reverse direction. Senators were sympathetic to those that can’t afford health insurance and were concerned for hospitals that have experienced hardships as a result of the Affordable Care Act. However, Medicaid is intended to cover the most vulnerable. Under current guidelines, spending on Medicaid accounts for approximately 20% of our total state budget. An increase in the state’s portion to cover more than 75,000 new enrollees could jeopardize the funding for other state programs.
Unlike the two previous years, lawmakers spent just over 3 hours debating the issue before a motion was made to bracket LB 472 until the end of the legislative session. The motion to bracket was successful on a 28-16 vote, which means that LB 472 will not be debated again this year.
This past week, senators gave first-round approval to LB 519, which reflects the recommendations from a study by the Education Committee on the educational uses of lottery funds. The Nebraska Constitution specifies that forty-four and one-half percent of the money remaining after the payment of prizes and operating expenses shall be used for education as the Legislature may direct. Approximately $16 million is allocated per year for education projects.
Revenue from the lottery will continue to fund the Teacher Loan Forgiveness Program and Nebraska Opportunity Grants for higher education. New uses for the lottery funds will be for Competitive Innovative Grants and Expanded Learning Opportunity Grants for K-12 schools and for a Gap Tuition Assistance Program to provide funding to community colleges to assist eligible students in pursuing certification programs or licensure in high-demand occupations.
Programs currently funded by lottery proceeds that have been preliminarily recommended for funding through the General Fund include High Ability Learner Aid, Early Childhood Education Grants, Early Childhood Endowment Grants, and operating funds for the Military Child Compact. Decreased funding for Distance Education, which is currently funded by lottery proceeds, is contained in LB 343. The ACT Pilot Project and Career Education programs will not be funded.
The Speaker announced this past week that the Legislature will begin working into the evening beginning April 28. Although we have already met for more than 60 days, we still have many major issues before us, including the budget, repeal of the death penalty, prison reform, and workplace protections based on sexual orientation and gender identity.
As we begin the last third of this legislative session, I encourage you to contact me with your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is firstname.lastname@example.org and my telephone number is (402) 471-2733.
In 1965, legislation was passed authorizing a Medicaid program in Nebraska. Medicaid offers health insurance for children in low-income families, pregnant women, the elderly and the disabled, as well as a small number of parents with income levels below 54% of federal poverty level. Medicaid is jointly funded by the federal government and the state, with the federal government currently paying 55% and the state 45%.
In 2010, President Obama signed the Patient Protection and Affordable Care Act, creating an individual mandate for health insurance and establishing health insurance exchanges. As a result, it is expected that the number of participants in Medicaid will grow among those currently qualified, due to increased awareness of the program.
Last year, the Supreme Court ruled that the requirement to expand Medicaid was to be voluntary for individual states. The expansion would cover low-income adults from ages 19-65. LB 577 was introduced to require the state to expand Medicaid. This reflects a major expansion of the program, as adults without dependent children were not previously eligible for the program, unless they were disabled. As an incentive for states, the federal government has agreed to pay 100% of the costs of the expansion for the first three years. This reimbursement would decrease to 90% by 2020.
Whether the state should approve this expansion was the topic of five hours of testimony at the public hearing on LB 577, held this past week before the Health and Human Services Committee. The director of the Medicaid division, within the Nebraska Department of Health and Human Services, testified against the bill. The Governor has made his opposition well-known, in that he thinks it will cost too much money and take dollars away from other state priorities.
Although it is hard to predict accurately, the Legislative Fiscal Office projects that the cost to implement the expansion from 2014 through 2020 would be $2.5 billion, of which $75 million would come from state funds. This does not include the additional $60 million that will be required from state funding and $140 million from federal funds for mandatory costs associated with the federal health care reform law over just the next two-year period. This will be one of the major issues that the Legislature deals with during this session.
I introduced LB 101 before the Revenue Committee this past week. LB 101 would reduce the valuation of agricultural land for school district taxation purposes from 75% to 65% of actual value over a five-year period. School districts are the largest recipient of local property taxes. Such a decrease in valuation would trigger an increase in equalization aid for school districts that contain agricultural land and receive equalization aid. The number of non-equalized school districts is increasing and this legislation could help reverse that trend.
Rural landowners represent a small percentage of the state’s population but shoulder a significant portion of the property tax burden. Agricultural land values have increased by double digit numbers the last several years, thereby enhancing the problem.
During the discussion of the Governor’s proposal to repeal the income tax and eliminate specific sales tax exemptions, we heard repeatedly that property taxes need to be included in any discussion of our tax code. Legislation calling for a comprehensive study of our tax system has been introduced and prioritized.
At the public hearing, I asked the Revenue Committee to advance LB 101. However, if the decision was made to hold all bills dealing with tax revisions pending the outcome of the comprehensive study, I requested that LB 101 be included in these discussions.
If you have comments on the Medicaid expansion or other issues before the Legislature, I welcome your input. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is email@example.com and my telephone number is (402) 471-2733.