Charles Duarte, administrator of the state Medicaid program, told the Medical Care Advisory Committee on Tuesday that pulling Nevada out of the federal program is far from a done deal.
"We were just asked to look at the concept," he said.
Duarte said the request from the governor's office came because Medicaid is projected to be "a growing portion of the state budget at a time when we're cutting education and other programs."
Gov. Jim Gibbons' senior staff asked the Department of Health and Human Services to look into what would happen if Nevada pulled out of Medicaid, which a study by conservative think tank The Heritage Foundation said would save nearly every state millions.
Duarte said the federal health care reform bill as written will cost Nevada an estimated $613 million between 2014, when those provisions take effect, and the end of 2019.
Duarte, administrator of the Division of Health Care Financing and Policy, said $133 million of that is because the bill makes many more people eligible for Medicaid coverage, qualifying those with incomes up to 133 percent of the federal poverty limit. At present, he said, those on welfare are at about 37 percent of federal poverty levels.
"That's a significant expansion," he told the committee.
The biggest hit to the state, he said, is the "woodwork" eligibles - those who are currently eligible for Medicaid but aren't collecting. The health care bill's requirement that everyone purchase insurance, he said, would bring many of those "out of the woodwork." The estimated cost to the state: $385 million.
Duarte said the department is analyzing the impact of any decision to pull out of Medicaid.
Lynn Hettrick, deputy chief of staff to Gibbons, said last week that pulling out of Medicaid wouldn't cure this year's budget crisis because the state would pick up those who lost coverage in the short term. He said it would save money long term, however, because the state would have much more control over how to provide medical services to those in need.
Hettrick said he doubts it would ever actually happen because, if a number of states start looking at dropping Medicaid, the federal government "will close that loophole."
But he said the threat may help convince the government and Congress to fix some of the problems, which are making it practically impossible for states to afford Medicaid.