Rural Health Policy Project

Nebraska Residents Will Have to Wait for Medicaid Expansion While Governor Puts More Obstacles in Path to Coverage

Writer George Orwell would love the Nebraska Governor’s complex plan to implement the simple expansion of Medicaid health coverage passed by Nebraska voters in 2018 that would help an estimated 95,000 of the state’s residents gain coverage. In Orwell’s book “1984”, the fictional state of Oceania asked citizens to accept opposing ideas as both being true – depending of course on what was more convenient for those in power:  “War is peace. Freedom is slavery. Ignorance is strength.” Nebraska Governor Ricketts may want visit a high school English class discussing Orwell’s novel as there are many parallels between the dystopian society described in the book and his plan for Medicaid.

To start, it’s important to note Governor Ricketts has long opposed more affordable health coverage through Medicaid expansion in the state. Immediately after the 2018 election, the Governor started explaining why his administration couldn’t quickly and efficiently abide by the voters’ wishes to extend Medicaid health coverage. Apparently the Governor’s frequently noted use of “lean Six Sigma methods” borrowed from the business world to make government “effective, efficient and customer focused” doesn’t extend to speed or efficiency in providing affordable health care to more state residents through an already operating Medicaid system.

Ricketts also repeatedly warned that Medicaid expansion’s costs would be considerable, hard to fit into the budget, and could require cuts in other state priorities such as education and transportation. Other state legislators echoed those arguments in opposing Medicaid expansion, adding that they might also cut benefits for existing Nebraskans on Medicaid.

Despite all these dour predictions of budget disaster should Medicaid expansion be approved, the Nebraska legislature is currently debating a budget that not only completely funds Medicaid expansion but also “boosts payment rates for Medicaid, child welfare and other service providers. It provides more funding for K-12 schools as called for under the state aid formula.”

And even though the warnings about the insurmountable budget problems created if voters approved Medicaid coverage are proving to be untrue, the Ricketts Administration has drafted a preliminary plan to submit to the federal government for Medicaid expansion that tries to limit health coverage. And it is a plan that Orwell’s fictional government in 1984 would embrace:

Less is more for many: Nebraska’s proposed plan would have fewer benefits and more restrictions compared to regular Medicaid not only for the estimated 94,000 adults who would newly qualify for coverage but also for 25,000 Nebraskans – mostly parents with children in the home – currently on Medicaid. Parents and other adults would lose benefits for missing doctor’s appointments, not cooperating sufficiently with a state-hired insurance company care manager, or delay in filing a status form.

Reducing payments to rural and urban hospitals will help keep them open: Buried deep in the Nebraska plan is a provision to eliminate what has been standard Medicaid practice for years helping patients get treatment and providers get paid. A patient who qualifies for Medicaid but wasn’t enrolled before they got sick and showed up at the hospital or physician’s office, currently has “retroactive eligibility” three months prior to qualification. Practically, a hospital or other provider can immediately provide treatment to people they know should already be enrolled in Medicaid with the expectation their bills will be paid. Nebraska’s limitation of retroactive eligibility will cost providers – especially hospitals who provide the most expensive care – millions in revenue and make coverage harder to access.  One hospital in Florida estimates a similar change in that state will cost it at least $4 million this year. In the face of a hospital closure in the state and a recent study estimating that nearly a quarter of rural hospitals around the country are at risk of closure, this is a dangerous path to pursue.

Complexity is better than simplicity: Governor Ricketts has proposed changing Medicaid from one comprehensive benefit package to at least three different types of coverage, each level with fewer benefits. No wonder state number crunchers estimate Nebraska Medicaid’s administrative costs will triple under the Ricketts plan.  Nebraskans may be moved between levels depending on factors ranging from pregnancy to whether they miss a certain number of physician visits, or don’t fill out paperwork correctly to report 80 hours of work.  And many of these requirements apply not only to the 94,000 newly enrolled Nebraskans but to 25,000 parents currently on Medicaid. So, while a pregnant woman may have standard Medicaid coverage, after her pregnancy she will be moved to “Prime Coverage” which, despite the name, is acknowledged by state officials to have fewer benefits.  If she misses a few appointments or doesn’t complete a “wellness” visit for the managing insurance company? Now she’s moved to “Basic Coverage” which removes benefits like dental and vision in addition to worse coverage than standard Medicaid.

Paperwork is virtuous: Nebraska’s plan joins the rush to add controversial and ineffective work reporting requirements to get Medicaid services – although parents with children in the home are exempt. In Arkansas, a similar reporting requirement led to more about 18,000 people losing their health coverage before a federal court found it violated the law.   Nebraska’s penalty is less stringent than loss of coverage, however, people who need health care but don’t file the reporting paperwork correctly lose benefits rather than coverage.

Sick people can wait: Nebraska voters approved Medicaid expansion in November 2018. Currently, Nebraska’s Governor projects starting the plan in October 2020 – nearly two years after voters approved the expansion of health care. This timeline is far longer than the six months many states have taken to expand. This timeline is also longer than the delay in Maine where a Governor hostile to Medicaid expansion defied voter’s wishes and delayed expansion for over a year before he lost his office to current Maine Governor Janet Mills. Governor Mills  signed the order expanding coverage on her first day in office in 2019.

Red tape sets patients free: Currently Nebraska determines eligibility for the Medicaid once a year – simplifying administration for patients, providers and government while ensuring continuing eligibility for the program is verified on a regular basis. The proposed Nebraska plan changes this to once every six months, including this more stringent requirement not only on new expansion enrollees but on parents and other caretakers currently getting Medicaid as well.

Expanding Medicaid requires less coverage for 19 and 20 year olds: Under federal law, children on Medicaid can stay on the program through age 21. Children get comprehensive services through Medicaid as a result of  Early and Period Screening, Diagnostic and Treatment (EPSDT) the pediatric benefits package recommended by the American Academy of Pediatrics.  Nebraska’s plan would eliminate this guarantee for 19 and 20 year olds.

Adam Searing is an Associate Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.