Second attempt at Medicaid expansion stalls

After eight hours of debate over two days, an attempt to force a vote on a bill that would provide a new option for Medicaid expansion in Nebraska failed March 19.

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 54,000 uninsured and underinsured individuals who are newly eligible under the federal Affordable Care Act (ACA).

Campbell said the proposal is a result of input from discussions on a similar bill that stalled during general file debate last year. Lawmakers expressed concern about the previous Medicaid expansion proposal, she said, and asked for greater private sector involvement and that participants have “skin in the game.”

“You were right,” she said. “What we have before us in LB887 is a far different bill. Because of waiting and studying and research, we have a far better bill.”

Campbell said the bill would help the state bridge the coverage gap for those who earn too much to qualify for Medicaid, but too little to qualify for insurance premium tax credits under the ACA. The bill would provide 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 percent 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 it is 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 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.

An amendment offered March 18 by Campbell, which initially fell one vote short of adoption, removed provisions requiring that the oversight committee participate in negotiations with the federal government regarding the state’s Medicaid waiver.

Campbell offered a successful motion to reconsider the vote, saying the amendment was crucial to ensuring the constitutionality of LB887. The amendment was adopted on a second vote of 29-7.

Sen. Dan Watermeier of Syracuse offered an amendment March 18, adopted 34-0, which removed reference in the committee amendment to the Institute for Healthcare Improvement. He said state law should not include a reference to a “think tank.”

A pending Health and Human Services Committee amendment would make several technical changes to the bill and add provisions of LB578, a bill originally introduced by Omaha Sen. Jeremy Nordquist. The provisions would redirect a portion of the funding previously used to subsidize health insurance coverage for Nebraskans with pre-existing conditions to a newly created Health Care Access and Support Fund.

The fund would be used to pay for health care coverage required under WIN for newly eligible adults below 133 percent FPL provided through the Medicaid state plan amendment and waivers.

Nordquist said that even without his amendment, LB887 would result in general fund spending of only $61.6 million through 2020.

“This bill will cost us less than one-quarter of one percent of our total spending over the next six years,” he said.

Papillion Sen. Bill Kintner opposed LB887, saying federal funding for Medicaid expansion relies solely on a promise from President Obama to fund the bill, adding that LB887 would cost 40 percent more than the Medicaid expansion bill introduced last year.

“Considering the president’s track record … I’m not sure it makes sense for us to commit to a financial burden that we can’t possibly afford if the federal government doesn’t keep their promise,” Kintner said.

Omaha Sen. Pete Pirsch also expressed concern about the bill, citing Oregon’s recent experience with Medicaid expansion.

Rather than decreasing reliance on emergency room care by increasing utilization of primary care providers and preventive wellness, he said, Oregon’s expansion of Medicaid to approximately 80,000 newly eligible individuals resulted in a 40 percent “surge” in emergency room visits. He said the state should carefully consider the possible unintended consequences of expanding the state’s Medicaid program.

“I do not want Nebraska being the canary going down the coal mine,” Pirsch said.

Grand Island Sen. Mike Gloor, who opposed last session’s Medicaid expansion proposal, spoke in support of LB887.

The current bill would do more than simply expand Medicaid, Gloor said, and is a first step toward transforming Medicaid provision in the state using federal dollars rather than Nebraska taxpayer funds. He said the current system is not sustainable and needs to shift its focus to primary care and patient-centered medical homes.

“We’ve got to change the Medicaid system,” Gloor said. “This is a Nebraska option. It makes sense for us to move in this direction.”

Under the bill, after the first year in WIN, a monthly contribution of 2 percent of income for adults with incomes greater than 50 percent of the FPL would be required. Contributions would be waived if a member completes preventive services or wellness activities.

Omaha Sen. Beau McCoy offered an amendment during floor debate March 19 that would have increased the contribution to 5 percent. He said participants should be required to pay the maximum amount allowable under federal law.

“I think this is necessary to make sure that there is as much buy-in for members in this program – if this [bill] were to go forward – as possible,” McCoy said.

Campbell offered a motion to invoke cloture, which would end debate and force a vote on all pending action on the bill. The motion failed on a vote of 27-21, falling six votes short of the number required.

A failed cloture motion results in debate on a bill ceasing for the day. LB887 is not likely to be debate again this session.