Nebraska’s Medicaid program has been overhauled in 2016 as Heritage Health, which will take effect January 1, 2017 and will combine all necessary care into one coordinated system, utilizing three managed care companies.
The state has not yet expanded Medicaid under the Affordable Care Act (ACA), so eligibility guidelines are unchanged from 2013.
Private option expansion bill failed
On January 19, 2016, Nebraska State Senator John McCollister (R, Omaha), introduced Legislative Bill 1032 in an effort to expand Medicaid in Nebraska. McCollister has been leading the push for Medicaid expansion in the state for almost a year, but his legislation failed to advance out of committee.
LB1032 would have been a privatized approach to Medicaid expansion, similar to the system Arkansas has been using since 2014. LB1032 also included optional education and job skills training for Medicaid enrollees, in an effort to help them transition to higher-paying jobs and away from public assistance programs like Medicaid.
In early discussions, Governor Ricketts has reiterated his opposition to Medicaid expansion, including the privatized version proposed in LB1032. And conservative lawmakers were opposed to LB1032 as well, ultimately dooming it. The 2016 legislative session ended in Nebraska with no progress towards Medicaid expansion or closing the state’s coverage gap.
Previous efforts to expand Medicaid
In April 2015, two professors from the University of Nebraska-Kearney published the results of a study that found that expanding Medicaid would result in significant financial benefits for the state. After exhaustive study, the researchers concluded that expansion of Medicaid “passes a rigorous cost/benefit analysis.”
Senator McCollister found the results of the study compelling, and in May 2015, he introduced LR306, a bill to study possible ways that Medicaid expansion could be implemented in Nebraska.
In September and October 2015, a coalition of state lawmakers – led by McCollister – met to discuss possible avenues for expanding the state’s Medicaid program.
Governor Pete Ricketts continued to oppose Medicaid expansion, calling it too expensive and insisting that community health clinics are a better solution for Nebraska (despite the fact that they aren’t equipped to provide a full range of healthcare). But the U of N study found that if Nebraska had expanded Medicaid already, the state would have saved $3.5 million in the 2016 fiscal year. The savings increase in coming years, making continued resistance to Medicaid expansion a financially poor decision.
If coverage is expanded, an additional 79,600 people could be covered under Nebraska’s Medicaid program by 2020. In January 2015, corporate and philanthropic leaders in Nebraska were working to rally support for Medicaid expansion.
The current situation
Because Nebraska has thus far rejected federal funding to expand its Medicaid program, eligibility rules in the state are unchanged from 2013. ACA premium subsidies for private plans are only available for people with household incomes between 100 percent and 400 percent of poverty level; there is no financial assistance for people living below the poverty line in states that have not expanded Medicaid.
In Nebraska, that means an estimated 27,000 people are in the coverage gap, with no access to Medicaid, and also no realistic access to private insurance, as they would have to pay the full premium themselves, with no subsidy to reduce the cost. Nebraska is one of 19 states that have taken no official steps towards expanding their Medicaid programs as of early 2016.
Leaving money on the table
If Nebraska were to expand its Medicaid program, roughly 80,000 residents would gain coverage under the program over the next five years. By not expanding Medicaid, Nebraska is missing out on $3.1 billion in federal funding between 2013 and 2022. And Nebraska residents are paying federal tax dollars that are being used to fund Medicaid expansion in other states – to the tune of $3.3 billion over the next decade.
Failed legislative attempts at expansion
Although Nebraska has not accepted Medicaid expansion yet, bills have been introduced in each of the last four sessions to try to move the state forward with Medicaid expansion.
In 2013, LB577, which would have created a modified Medicaid expansion program, was rejected by the legislature in Nebraska. A year later, the Wellness in Nebraska Act (LB887) was introduced in January 2014 by Senator Kathy Campbell, but it didn’t pass during the 2014 legislative session, and was indefinitely postponed in April 2014.
The Wellness in Nebraska Act would have expanded traditional Medicaid to people with incomes up to the poverty level (those who are currently in the coverage gap), and would have relied on federal Medicaid funding to purchase private coverage for people with incomes between 100 percent and 138 percent of poverty. This has been a fairly popular approach to Medicaid expansion among Conservative leaders nationwide – several states are using waivers to implement unique approaches to Medicaid expansion that rely on purchasing private coverage for at least some enrollees.
The Nebraska Hospital Association was very supportive of LB887, as they stand to lose about $1.3 billion over the next decade if declining federal reimbursement isn’t offset by Medicaid expansion.
In 2015, lawmakers introduced Legislative Bill 472 to expand Medicaid, but it did not pass out of committee.
Who is eligible?
Because Nebraska has not expanded Medicaid, eligibility guidelines are the same as they were in 2013. Non-disabled adults without children are ineligible for coverage, regardless of how low their income is. Coverage is available for the following populations:
- Parents with dependent children, if their household income doesn’t exceed 57 percent of poverty ($11,280 a year for a family of three).
- Pregnant women with household income up to 194 percent of poverty.
- Children with household income up to 213 percent of poverty.
How do I apply?
- You can enroll online at HealthCare.gov at any time – Medicaid enrollment is available year-round. You can also enroll by phone via the HealthCare.gov call center at 800-318-2596.
- You can also enroll online at ACCESSNebraska at any time.
- The Do I Qualify screening tool at ACCESSNebraska can help you determine which public programs you’re eligible for – you may be able to enroll in other benefits beyond Medicaid.
A net decrease in enrollment in 2014
By mid-April 2014, 9,879 Nebraska exchange applicants had enrolled in Medicaid or CHIP. They were already eligible based on the pre-2014 enrollment guidelines, but may not have known that Medicaid was available to them.
But from the fall of 2013 through July 2016, total net enrollment in Nebraska’s Medicaid program actually declined by 9,764 people, which amounts to a decrease of 4 percent. Nebraska and Wyoming are the only two states where Medicaid/CHIP enrollment declined between 2013 and July 2016.
New coordinated system will have thre managed care organizations
As of 2013, nearly 76 percent of Nebraska’s Medicaid enrollees were in managed care programs run by Aetna, AmeriHealth, and UnitedHealthcare. The state is overhauling its Medicaid managed care system in 2016, and managed care contract bids were submitted by six carriers in early January.
The overhauled program is called Heritage Health, and it combines coverage (for Medicaid and CHIP) of physical health, behavioral health, and pharmacy care into one coordinated system. The new system will take effect January 1, 2017. Three carriers were awarded contracts to serve as managed care plans under Heritage Health:
- Nebraska Total Care (Centene)
- UnitedHealthcare Community Plan
- Wellcare of Nebraska
Nebraska Medicaid history
Nebraska implemented Medicaid in July 1966, just a few months after the first wave of states did so in January of that year.
In 1986, Medicaid was 8.6 percent of Nebraska’s general fund appropriations. By 2006/07, it had grown to 17.8 percent. This is similar to the increases other states have seen, and reflects a similar trajectory to the overall increase in healthcare spending in the US as a percentage of GDP. But while Medicaid expenses grew at a rate of about 11 percent over those two decades, general fund revenue grew by only 6.9 percent. Official in Nebraska have highlighted the financial implications of Medicaid spending in this report, and are calling for reform that would help the state hold down costs going forward.
The federal match rate for Medicaid (the portion that the federal government pays, in addition to what the state pays) is tied to the per capita income in the state, and rising incomes in Nebraska mean that the federal match rate for Medicaid costs is decreasing from 53.27 percent to 51.16 percent in 2016.
This will be the lowest federal match rate in the history of Nebraska’s Medicaid program, and the impending decrease led the Nebraska Department of Health and Human Services to request $76 million from the legislature in October 2014, to cover the anticipated budget shortfall over the upcoming two fiscal years.