Important part of ACA ruling for 2013 state budget

There's an important, and unexpected, component of the ACA ruling that is significant for our state's budget. Previously the Governor has said that while he supports a budget that would not cut higher education, or K-12, and would like to restore public service worker compensation, including faculty and staff pay, and even restore merit pay in the 2013-2015 budget, those priorities would be threatened by prospect of a rapid expansion in the Medicaid caseload as a result of the Affordable Care Act. Indeed, he repeated this concern this morning but noted that the consequences of the decision are "unclear."

He said Nevada "will prepare to meet the serious financial implication of this decision.

An analysis by the state in 2010 found that the law would cost the state $574 million between 2014 and 2019, mostly through increased Medicaid costs.

"The implications for Medicaid costs are still unclear, but Nevada will prepare to meet the serious financial implications of this decision," Sandoval said.

According to UNLV Boyd School of Law professor Stacey Tovino, the one part of the law that the Court struck down was the provision penalizing states if they did not increase their Medicaid caseload by withdrawing all Medicaid funding. Instead, the Court made explicit that States may choose whether or not to expand Medicaid eligibility (and thus Medicaid caseload and budget obligations). From the decision

As a practical matter, that means States may now choose to reject the expansion; that is the whole point.... Some States may indeed decline to participate, either because they are unsure they will be able to afford their share of the new funding obligations, or because they are unwilling to commit the administrative resources necessary to support the expansion.  Other States, however, may voluntarily sign up, finding the idea of expanding Medicaid coverage attractive, particularly given the level of federal funding the Act offers at the outset.

Now, to be clear, this is not to say that we in Nevada should not be concerned with the vexing issue of how to make health care affordable especially for those of the least means. It does not mean that the longstanding Sophie's Choice for states between human services for those in need and public investment in higher education is any less acute. Nor does it diminish the corresponding need for a broad-based source of adequate revenue for the state.

But the decision does give states like Nevada more short-term discretion in how to avoid further cuts to education and to restore competaitve compensation in highly competitive labor markets like academia and does lift what had been presented as an insurmountable burden for the 2013 legislature.