The Republican governor said the measure will have to be covered by existing state tax revenue, even if that means less money for K-12 schools, roads or lowering property taxes.
Ricketts said he expects “a lively debate” in the Legislature next year as lawmakers and stage agency officials prepare to implement the program and seek the necessary federal approval.
“I’ve made it very clear I’m not going to raise taxes, so this is going to have to fit into the budget with all of our other priorities,” Ricketts said in an Associated Press interview. “That means that other priorities we have in the budget — things like K-12 education, higher education, property tax relief, potentially even roads — are all going to have less money available.”
Ricketts made the comments as he outlined his general plans for the next four years after winning a second term in Tuesday’s election. Ricketts said he hopes to build on his first four years with a continued push to promote Nebraska businesses nationally and abroad. He said he hopes to enact policies that help create new, high-skill jobs, cut regulations for businesses and reduce property taxes.
It’s unclear exactly how much the expansion will cost, but estimates have ranged from $40 million to $69 million annually for the state’s share. The federal government will pay 90 percent of the total cost, starting in 2020. Ricketts declined to say how he plans to fit the new cost into the budget he’ll submit to lawmakers in January.
Supporters said the vote to expand Medicaid will deliver longer-term economic benefits for Nebraska. The measure will create and sustain an estimated 11,000 jobs, mostly in health care, and reduce financial pressure on counties that cover the cost of uninsured residents, said Kate Wolfe, a spokeswoman for the Insure the Good Life ballot campaign.
Wolfe said the measure is likely to reduce personal bankruptcies triggered by large medical debts, which collectively can become a drag on the economy. A study by two University of Nebraska at Kearney professors found that expanding Medicaid will generate an estimated $1.3 billion annually in economic activity.
“In the long run, there are going to be some costs to the state,” Wolfe said. “But we know the benefits far outweigh the costs.”
Lawmakers have not yet discussed how to pay for the expansion measure, but the issue may come up at their annual pre-session gathering later this month, said Sen. John Stinner, chairman of the budget-writing Appropriations Committee.
Stinner, a Republican who opposed the expansion measure, said he was concerned that the program’s costs and the number of enrollees could grow faster than expected. Medicaid costs over the last 20 years have outpaced the natural growth of state revenue and expanding the program could accelerate that trend, he said.
“I think it’s going to be a challenge” to fit it into the budget, said Stinner, of Gering. “It doesn’t leave very much room for things like property taxes.”
One option lawmakers and Ricketts might have to consider is cutting so-called optional programs within the current Medicaid program, said Jessica Shelburn, who campaigned against the ballot measure as state director of the fiscally conservative Americans for Prosperity-Nebraska.
The federal government requires state Medicaid programs to cover 13 services, including hospital and physician visits and laboratory work. But Nebraska also covers 19 optional services, such as dental and vision care and speech therapy.
“That’s a viable option to try to make this workable,” Shelburn said. “But it comes at a heavy price tag for those who are receiving the services.”