Gov. Joe Lombardo is asking Congress not to slash Medicaid funding, warning that while fiscal responsibility is vital, cuts to the “safety net program” could have “serious consequences” in a state heavily dependent on the federal health insurance program. 

The request came in the form of a letter Wednesday, outlining the Republican governor's concerns about a variety of cuts to the program proposed in a budget resolution passed by congressional Republicans on Tuesday. The letter warned that the cuts could spell financial trouble for the Silver State.

“Nevada has demonstrated that federal investment in the state’s Medicaid program has improved both health outcomes and productivity, yet challenges remain,” Lombardo wrote. “By leveraging federal funding the state has expanded access to school health services, lowered the uninsured rate, and made significant progress in enhancing behavioral health care for both children and adults.”

He noted that as one of the fastest-growing states in the country, Medicaid gives Nevada flexibility to adjust to demographic changes and “limitations on Medicaid funding would clearly hinder that ability.” 

Of the proposals being weighed for cuts, Lombardo highlighted the following issues as “most detrimental for Nevada”: rolling back expanded Medicaid for low-income residents, imposing a per-capita limit on how much the federal government will pay for Medicaid and lowering the matching funds for hospital provider fees, which Nevada intends to use for overhauling the state’s behavioral health care system for children.

“Beyond its role providing coverage for vulnerable populations, hospitals, clinics, and providers across the state depend on Medicaid reimbursements to sustain operations, maintain staffing levels and invest in critical services,” Lombardo wrote in a separate message to legislators.

Lombardo’s missive follows calls from legislative Democrats for answers to the proposed Medicaid cuts. It comes ahead of a scheduled joint Senate-Assembly Health and Human Services hearing on Wednesday evening, where legislative Democrats have called state officials and other entities to discuss the potential ramifications of the cuts. 

“We don't have all the answers yet, but we learn more every day that these cuts will devastate families, devastate their economic security, cause chaos for our health care providers and cost our state budget billions of dollars,” Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) said during a press conference Wednesday. 

With about 1 in 4 Nevadans — 800,000 people — covered by Medicaid, Cannizzaro said it’s crucial to protect the state-managed health insurance program. She called on Rep. Mark Amodei (R-NV) “to show a little Nevada independence and promise to vote down these plans.” 

Lombardo ended the letter by noting that Nevada remains committed to being a constructive partner in ensuring fiscal responsibility, but “funding cuts alone will not resolve the root causes of Washington’s budgetary challenges or the rising cost of health care.”

Nearly impossible to fill Medicaid gaps with only state revenue

After Nevada expanded Medicaid in 2014 under Gov. Brian Sandoval — the first Republican governor in the country to do so — the state’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. 

As of 2023, Nevada’s uninsured rate was about 10.7 percent. Data from the Annie E. Casey Foundation indicates about 8 percent of Nevada children are uninsured as of September 2024.

Under the current setup, the federal government pays 60 percent of the cost of traditional Medicaid — focused on children, pregnant women and people with disabilities — and 90 percent for the “expanded population” — consisting of a broader group of low-income people who became eligible for coverage under the Affordable Care Act’s expansion effort a decade ago.

That enhanced federal matching rate was identified by House Republicans as a possible cut to help pay for legislation codifying tax cuts signed into law during President Donald Trump’s first term. Trump has promised not to touch Medicaid funding, but the House GOP proposal relies on cutting Medicaid funding to pay for the tax cuts — ending the enhanced federal rate for the Medicaid expansion population could generate up to $560 billion in savings over a decade.

But Nevada lawmakers say the proposal to strip away that 90 percent federal matching rate (which helps cover about 368,000 individuals in the Silver State) will make it nearly impossible for the state alone to make up the difference and lead to Nevada’s uninsured rate skyrocketing.

State officials indicated the move would likely cost the state more than $1.9 billion over the next two years — money that Cannizzaro told reporters on Wednesday she doesn’t know the state would be able to replenish.

“If this money is lost to the state of Nevada … Governor Lombardo will have to submit a plan of which people and what programs he is going to cut in health care, what health care services we will no longer be able to offer as a state, and which Nevadans will ultimately lose their health care,” she said.

She predicted that the Legislature would need to be called into a special session if the cuts take place after the 120-day legislative session.