New Medicaid expansion proposal discussed

The Health and Human Services Committee heard testimony Jan. 29 on a bill that would provide a new option for Medicaid expansion in Nebraska. Debate on a similar proposal stalled during general file debate last session.

LB887, sponsored by Lincoln Sen. Kathy Campbell, would establish the Wellness in Nebraska Act (WIN). Campbell said the measure would provide health care coverage through a Medicaid expansion demonstration waiver to approximately 55,000 uninsured and underinsured individuals who are newly eligible under the federal Affordable Care Act (ACA).

Campbell said the proposal is the result of a thorough study of how other states are approaching the problem of individuals who fall into the “coverage gap” – those who earn too much to qualify for Medicaid, but too little to qualify for insurance premium tax credits under the ACA.

Calling the bill “an innovation in health care delivery,” Campbell said it would help the state bridge the gap by providing coverage through the WIN Marketplace and WIN Medicaid.

Under the WIN Marketplace, the bill would provide coverage through health insurance premiums paid by Medicaid funds to purchase qualified health plans on the marketplace for newly eligible individuals who earn between 100 and 133% of the Federal Poverty Level (FPL). The bill includes an option to cover premiums through payment of the employee portion of employer-sponsored insurance if determined to be cost effective.

Under WIN Medicaid coverage, Medicaid managed care would be available to newly eligible individuals at or below 100 percent FPL. Newly eligible individuals at or below 133 percent FPL would qualify if they are medically frail or have exceptional medical conditions.

Medicaid funding would be provided through an enhanced match of federal funds. Federal funds would cover 100 percent of costs from 2014 to 2016 and would decrease incrementally to 90 percent starting in 2020.

If federal funding under the ACA falls below 90 percent, the bill would require the Legislature, in the first regular session following the reduction, to review WIN to determine how to mitigate the impact on the state.

The bill also would create an oversight committee within the Legislature to work with the state Department of Health and Human Services (DHHS) and other stakeholders to apply for the Medicaid waiver and design a variety of innovations to improve the quality of health care provision and contain costs.

“The effort to develop WIN isn’t about numbers and dollars,” Campbell said. “It’s about our neighbors, friends and relatives who need health care.”

Sharon Lind, testifying on behalf of the Nebraska Hospital Association, supported the bill. She said closing the coverage gap is especially important in rural areas where poverty is prevalent and employer provided health insurance is less common.

Lind said the bill would improve the state’s current health care delivery model by using available federal funds to encourage wellness and provide more care in clinic settings rather than emergency rooms.

“It is unconscionable for Nebraska to turn its back on this federal assistance,” she said.

Sarah Gershon of Lincoln also supported the bill, saying she falls into the coverage gap and cannot afford a test to determine whether she suffers from rheumatoid arthritis or lupus. Without a complete diagnosis, she said, there is no treatment.

Gershon said she has always worked – often more then one job – and wants to continue.

“Without treatment, my arthritis is progressing quickly,” Gershon said. “I’m 31, and I have so much more to contribute. Without medical help, I will end up on disability.”

DHHS CEO Kerry Winterer testified in opposition to the bill, citing the cost of expanding Medicaid enrollment and the administrative burden of carrying out the bill’s provisions.

Winterer said DHHS estimates indicate that WIN would result in over 113,000 newly eligible individuals by 2020, at a cost of $3.3 billion. In addition, he said, the complex provisions of LB887 would cost 40 percent more in state and federal funds than Medicaid expansion alone.

“Medicaid is the single largest program in state government,” Winterer said.

Doug Kagan of Nebraska Taxpayers for Freedom also testified against the bill. He said there are more cost effective ways to accomplish the goals outlined in WIN, including untaxed health savings accounts and reform of medical malpractice liability.

“Most importantly, these solutions would not make Nebraska more dependent upon government,” Kagan said.

The committee took no immediate action on the bill.