Nebraska and the ACA’s Medicaid expansion

Medicaid expansion passed in Nebraska via a ballot initiative, but won't take effect until October 2020; Draft expansion proposal published in October 2019

nebraska Medicaid guide

Medicaid expansion in Nebraska

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Nebraska’s Medicaid program was overhauled in 2016 as Heritage Health, which took effect January 1, 2017, combining all necessary care into one coordinated system, utilizing three managed care companies (Nebraska Total Care, UnitedHealthcare Community Plan of Nebraska, and Wellcare of Nebraska).

Medicaid expansion — dubbed the Heritage Health Adult Program — will take effect in Nebraska as of November 2020 (with enrollment beginning in August 2020), under the terms of the ballot initiative that was approved by the state’s voters in the 2018 election. At that point, roughly 94,000 people are expected to become newly eligible for Medicaid coverage in Nebraska (for perspective, there are about 242,000 people enrolled in Medicaid/CHIP in Nebraska as of 2019).

But the state is taking a protracted approach to implementation of Medicaid expansion, as it won’t take effect until nearly two years after voters approved the measure. And until the expansion is implemented, eligibility guidelines are unchanged. Parents with minor children are eligible for Medicaid with a household income of up to 63 percent of the poverty level (that’s about $16,222 for a family of four in 2019), but non-disabled adults without dependent children are ineligible for Medicaid, regardless of how low their income is.

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 16,000 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.

Medicaid expansion: Voters said yes in 2018, but implementation is delayed until late 2020

After lawmakers in Nebraska rejected Medicaid expansion for six years, proponents of Medicaid expansion took the issue to the state’s voters in the 2018 election.

Nebraska State Senator Adam Morfeld (D, Lincoln) had introduced Legislative Resolution 281CA during the 2018 session, calling for a constitutional amendment to be on the ballot, declaring health care a right and expanding Medicaid in Nebraska. But that measure did not advance in the Health and Human Services Committee.

Instead, supporters began working on a ballot initiative that would propose a Medicaid expansion law, instead of a constitutional amendment (7 percent of voters have to sign the petition to get a proposed law on the ballot, as opposed to 10 percent for a constitutional amendment). Medicaid expansion proponents began collecting signatures in March 2018, and successfully gathered enough signatures; the Nebraska Secretary of State confirmed in late August that Medicaid expansion would be on the ballot in Nebraska in November 2018. And a judge rejected efforts by Nebraska GOP Senators who tried to block the ballot initiative based on “procedural, statutory and constitutional flaws.”

Nebraska Initiative 427 passed with 53 percent of the vote. It required the state to expand Medicaid as called for in the ACA (ie, to people earning up to 138 percent of the poverty level). According to the terms of the initiative, the state had to submit an expansion plan to the federal government by April 1, 2019.

On April 1, the Nebraska Department of Health and Human Services announced the details of their Medicaid expansion proposal, and also submitted their state plan amendments to the federal government. The state is also maintaining a web page with a variety of information about the Medicaid expansion process. But Governor Pete Ricketts has long opposed Medicaid expansion, and while his Administration is implementing the voter-approved Medicaid expansion, they’re doing it on a very delayed timeline—a fact that Ricketts made clear soon after the ballot initiative passed. They’re also rolling out a two-tiered system, with enhanced benefits available for enrollees who participate in care management and, starting in the second year of the program, fulfill a community engagement/work requirement.

Voters in Utah and Idaho also approved Medicaid expansion ballot initiatives in the 2018 election. Utah’s expansion took effect in April 2019, but lawmakers scaled it back to only cover people with income up to the poverty level (leaving people with income between the poverty level and 138 percent of the poverty level on subsidized plans in the exchange instead). Idaho’s expansion will take effect in January 2020 (with enrollment beginning November 1, 2019), but the state is seeking federal approval to impose a work requirement for the expansion population.

The specifics of Nebraska’s Medicaid expansion: Draft proposal was published in October 2019

Although lawmakers in Utah and Idaho passed legislation in 2019 to adjust the terms of the Medicaid expansion ballot initiatives that voters had passed in those states, Nebraska lawmakers did not (and they did include funding for the state’s share of the cost of the first nine months of Medicaid expansion in the budget that was signed by Ricketts in May 2019). Instead, the Nebraska-specific modifications to Medicaid expansion have come from Governor Ricketts’ administration. And while the modifications are not as draconian as those implemented in Utah and Idaho, Nebraska is still deviating from the version of Medicaid expansion called for in the ACA — and approved by the state’s voters — and is adding administrative cost and additional complexity.

Nebraska’s plan is to expand Medicaid by adding the Heritage Health Adult Program to the current Heritage Health Program. Initially, the state had planned to transition about 25,000 low-income parents and caretaker relatives — who are already eligible for Medicaid in Nebraska — to the Heritage Health Adult Program (despite the fact that the federal government will only continue to pay the state’s normal match rate (52 percent) for these enrollees, rather than the enhanced (90 percent) matching rate that applies to the newly-eligible population). But the draft 1115 waiver proposal that the state published in October 2019 notes that the Heritage Health Adult Program will only include people who are newly eligible for Medicaid under the expansion guidelines (ie, adults with incomes up to 138 percent of the poverty level who would not have been eligible without expansion).

The Heritage Health Adult Program will have a basic level of coverage, modeled after the Blue Cross Blue Shield Pride plan, which is one of the largest small-group plans in Nebraska. All residents who are eligible for expanded Medicaid will qualify for at least the Basic Coverage.

Enrollees will be able to qualify for Prime Coverage if they meet additional requirements. Prime Coverage will include coverage for dental, vision, and over-the-counter drugs. In order to receive Prime Coverage in the first year, enrollees will need to participate in care and case management, select a primary care provider, and have an annual checkup.

Starting in year two, enrollees will also have to fulfill a work requirement in order to qualify for Prime Coverage. For 80 hours each month, they will need to either be working (or participating in job seeking activities through the state), going to school, volunteering for a public charity, or serving as a caregiver for a relative.

In order to retain eligibility for Prime Coverage, members will need to promptly notify the state Medicaid department of any pertinent changes in circumstances, and will have to avoid missing medical appointments without notifying the doctor’s office. Members who miss three or more medical appointments without notifying the doctor’s office would be locked out of Prime Coverage for the remainder of their current coverage period and for the next two coverage periods. [A coverage period will be six months long; Nebraska plans to continue to use annual redeterminations for overall Medicaid eligibility, but eligibility for Basic or Prime coverage in the Heritage Health Adult program will be based on six-month intervals.]

According to the state’s draft proposal, Nebraska officials expect nearly a third of the newly-eligible population to qualify for only the Basic benefits.

Not surprisingly, the different levels of coverage (ie, traditional Medicaid for pregnant, disabled, and elderly adults, Basic Coverage for some adults, and Prime Coverage for other adults) is expected to significantly increase administrative costs for Nebraska’s Medicaid program.

Nebraska plans to seek federal permission to eliminate retroactive eligibility for Heritage Health Adult Program enrollees. Instead of an effective date up to three months before the enrollment date, coverage would be effective the first of the month in which the enrollment is submitted. This is a change that could cost hospitals a significant amount of money.

The state initially planned to seek a federal waiver allowing the state to discontinue the Early and Periodic Screening Diagnostic and Treatment benefit for enrollees who are 19-20 years old. This is a federal Medicaid provision but Nebraska initially wanted to treat all able-bodied adults ages 19-64 in the same manner. In the official 1115 waiver draft, however, the state has noted that all 19- and 20-year-olds who are gain Medicaid eligibility as a result of expansion will automatically receive Prime Coverage, which will include EPSDT benefits.

Although the state is technically moving ahead with Medicaid expansion implementation, they’re doing so in a costly and complicated manner and taking an inordinately long time to get the program up and running. Although Nebraska submitted their state plan amendments and a summary of their proposal to CMS in April 2019, the state did not publish their draft 1115 waiver proposal until October 2019, and is accepting public comments on the proposal until November 26, 2019. After that, it will be submitted to the federal government for review.

Past efforts to expand coverage via legislation were unsuccessful

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. Several states are using waivers to implement unique approaches to Medicaid expansion, and New Hampshire and Arkansas both use waivers purchasing private coverage for at least some Medicaid enrollees.

In 2015, lawmakers introduced Legislative Bill 472 to expand Medicaid, but it did not pass out of committee. Also in 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.”

In January 2016, Nebraska State Senator John McCollister (R, Omaha), introduced Legislative Bill 1032 in an effort to expand Medicaid in Nebraska. McCollister had been leading the push for Medicaid expansion in the state for almost a year at that point, but his legislation failed to advance out of committee.

LB1032 would have been a privatized approach to Medicaid expansion, similar to the system Arkansas implemented in 2014, and New Hampshire implemented in 2016 (New Hampshire has abandoned the private approach, however, and switched to Medicaid managed care). 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 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.

And in 2017, just before the start of the Trump Administration, Sen. Morfeld introduced LB441, which called, yet again, for Medicaid expansion in Nebraska. But a legislative committee decided to take no action on the bill in the spring of 2017, as the state waited to see what would happen in terms of health care reform at the federal level (at that point, ACA repeal bills were still very much under consideration in Congress, although they all ultimately failed later in 2017).

Who is eligible?

Because Nebraska has not yet expanded Medicaid, eligibility guidelines are the same as they were in 2013.  Non-disabled adults without dependent 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 63 percent of poverty ($13,091 a year for a family of three in 2018). This will increase to 138 percent of the poverty level once Medicaid expansion takes effect.
  • Pregnant women with household income up to 199 percent of poverty.
  • Children with household income up to 218 percent of poverty
  • WHEN MEDICAID EXPANSION TAKES EFFECT in October 2020 (enrollment will begin in August 2020), adults up to age 64 with income up to 138 percent of the poverty level will be eligible for Medicaid as outlined above.

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.

Enrollment roughly the same as it was in 2013

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 amounted to a decrease of 4 percent. By early 2019, however, enrollment was back to nearly where it had been in 2013, with only 343 fewer enrollees.

About 90,000 people are expected to gain coverage once Medicaid is expanded, which will significantly increase total enrollment (only about 245,000 people currently have coverage).

New coordinated system has three 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 overhauled 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 took 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

These three carriers will also serve the new Heritage Health Adult population once Medicaid expansion takes effect in late 2020.

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.

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 decreased from 53.27 percent to 51.16 percent in 2016.

This was 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.

By fiscal year 2018, Nebraska’s federal match rate had increased slightly, to 52.55 percent.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

How to apply in NE

You can enroll online at HealthCare.gov or use the call center at 1-800-318-2596.  You can also enroll online at ACCESSNebraska, or print a paper application from their website.

Eligibility: Parents with dependent children are eligible with household income up to 57% of poverty.  Pregnant women with income up to 194% of poverty, and children with income up to 213% of poverty.

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