Some states have considered opting out of Medicaid in response to healthcare reform proposals to expand the Medicaid program. A new report from Nevada reveals that such a move would be disastrous for the state’s elderly and vulnerable residents.

Eliminating the Medicaid program in the state of Nevada would cause 54,900 aged and disabled residents to lose their health coverage, and 41,455 low-income elderly Medicare beneficiaries to lose assistance with Medicare premium payments, as well as help with out-of-pocket costs, according to a white paper issued by the Nevada Department of Health and Human Services.

If the state opted out of the federal Medicaid program, it would attempt to set up a program, the Nevada Safety Net for Health, which would use state and local resources to provide care for as many nursing home residents as possible. Although this program would maintain coverage for some of the most vulnerable, as many as 200,000 former Medicaid recipients would not be able to afford health insurance. Opting out of the federal program would add to the number of uninsured and increase costs among providers and governments, the white paper said.

Nevada’s Medicaid medical services budget for fiscal 2009 was roughly $1.4 billion, half of which came from the Title XIX federal medical assistance percentage. As much as 63% of that budget is spent on services for the aged and disabled, according to the white paper. As in every state, Nevada’s nursing homes receive the bulk of their funding from Medicaid.