Changes to Unemployment and Medicaid in the CARES Act

In March when Congress approved the CARES Act there was a provision making changes to the unemployment insurance program.  Most of us have heard about the ‘pandemic add on’ of $600 per week you can collect ON TOP OF the state’s unemployment benefits.  Well, now there is a little more to the story.

The Foundation for Government Accountability published a research paper on how this income affects Medicaid.  This is important because the state covers a share of the cost of Medicaid.  So any changes to that are important when we discuss budget issues for the state.

Here are the main findings from their paper:

1. The CARES Act changes how Medicaid treats unemployment insurance income
2. By not counting $600 per week in unemployment insurance as income, the CARES Act dramatically expands Medicaid eligibility
3. Medicaid budgets strained heavily by enrollment increases will not be covering people with income up to 3x the federal poverty line
4. Unemployed workers will lose federal subsidies for private insurance and be forced on to Medicaid
5. Shifting millions onto Medicaid means cash-strapped hospitals will receive lower reimbursement rates.

So, what’ the main takeaway?  Medicaid was created for those that are truly needy and this provision is not in the same spirit.  At a time when Nebraska is already expecting 10% drop in tax revenue, the last thing we need is for the state’s expenses to increase and put even more pressure on our state budget.