Transitional health insurance proposal stalls

A new option to provide coverage for uninsured Nebraskans was bracketed by lawmakers March 29. Several proposals in recent years to access federal Medicaid funds available to Nebraska under the Affordable Care Act (ACA) also have stalled during floor debate.

This year’s proposal—LB1032, sponsored by Omaha Sen. John McCollister—would create the Transitional Health Insurance Program (T-HIP) as an alternative means of providing health coverage to approximately 97,000 uninsured Nebraskans who are newly eligible under the ACA.

McCollister said the plan would utilize the private health insurance market to ensure coverage for 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.

“This is the fourth iteration of Medicaid [expansion] in Nebraska and we contend that it’s the most conservative and fiscally responsible,” McCollister said, adding that the proposal would bring $1.8 billion in federal dollars to the state and is projected to create 10,000 jobs.

As introduced, LB1032 would require the state Department of Health and Human Services (DHHS) to apply for a Medicaid waiver within 14 months of the bill’s effective date. Under the waiver, individuals ineligible for Medicaid with incomes below 133 percent of the federal poverty level would be enrolled in private health insurance through a premium assistance model in which Medicaid dollars are leveraged to purchase private health plans.

The plan would provide eligibility in two additional ways. An individual whose employer pays at least 50 percent of the total cost of the employee’s coverage would receive assistance in purchasing employer-sponsored insurance.

Additionally, participants exempt from enrollment in premium assistance, including individuals who are medically frail, would be enrolled in Medicaid coverage. Program participants with incomes over 50 percent of the federal poverty level would be required to contribute 2 percent of their monthly household income as a premium, along with an enhanced copayment for nonemergency emergency room use.

The bill also would refer participants to employment and education programs and create a pilot program that would provide education and skills training targeted at specific state workforce needs. The bill calls for data collection and analysis of whether providing health insurance impacts the ability of individuals to transition off of public assistance programs.

The program would be suspended should federal funding fall below 90 percent.

A Health and Human Services Committee amendment proposed an appropriation of $63 million from the state’s Health Care Cash Fund to pay the state’s match for coverage of the newly eligible Medicaid population.

The amendment also would end T-HIP after three years. DHHS would be required to notify participants of the termination and no appeals would be authorized. DHHS also would be required to hire a consultant to analyze the performance, revenue and savings of T-HIP six month prior to the legislative session when the program would terminate.

Lincoln Sen. Kathy Campbell, chairperson of the committee, said the amendment would address the concerns of lawmakers who had opposed Medicaid expansion proposals in the past. Opponents have acknowledged that uninsured Nebraskans need assistance, she said, but have not offered solutions.

“We have waited for three years and the only plans that have come forward are those that the supporters have put forward,” Campbell said. “Give us three years to prove that this can work.”

Omaha Sen. Heath Mello supported the bill and the amendment, saying the state cannot “turn a blind eye” to the broader fiscal implications of the state’s uninsured population. For example, he said, Nebraska spends $85 million in general fund dollars annually on aid to the state’s behavioral health regions.

“Ninety-three percent of that population would be covered under LB1023,” he said.

Sen. Bill Kintner of Papillion opposed the proposal, calling it unsustainable. Medicaid expansion in other states has cost billions more than projected, he said.

“It’s always more people than you think,” Kintner said. “It’s always more expensive than you think.”

Hoskins Sen. Dave Bloomfield offered a motion to bracket the bill until April 20, the last day of the session. He cited concern that the federal government would not uphold its share of the funding, noting that the federal government initially promised to fund special education in Nebraska at 40 percent, but currently is paying approximately 17 percent.

“The idea that the federal government will always live up to its promises is not accurate,” Bloomfield said.

Sen. Beau McCoy of Omaha supported the bracket motion, saying he sees more important priorities for the Legislature, including budgeting decisions regarding K-12 and higher education, infrastructure funding and tax cuts.

“That’s the future of our state,” he said, “not an ill-advised Medicaid expansion program that really doesn’t address the cost of health care—it really just addresses the access to health care.”

McCollister opposed the bracket motion. While the ACA may need reform and federal programs don’t always work as planned, he said, the issue of addressing Nebraska’s uninsured population persists.

“Two-thirds of the 97,000 uninsured are the working poor of Nebraska,” he said, “and of that number, 50 percent live in rural areas. Our uninsured fellow Nebraskans are the people who work one or more jobs in retail stores, the fast food industry, agriculture and construction. Do these hardworking Nebraskans really deserve to be seen as—treated as—lesser beings?”

The bracket motion was adopted on a 28-20 vote. Twenty-five votes were needed. The proposal is unlikely to be debated again this session.