First of governor-recommended HHS cuts discussed

The Health and Human Services Committee heard testimony Feb. 3 on three bills that are part of the governor’s budget recommendations relating to health and human services provision in Nebraska.

The bills were introduced by Lincoln Sen. Kathy Campbell at the request of the governor and together are projected to save the state approximately $12 million over the next two fiscal years.

LB465 would eliminate state-only benefits for certain non-citizen permanent residents who are in the United States legally but do not qualify for benefits under federal guidelines. Current federal guidelines require permanent residents to be in the U.S. for five years to qualify for benefits, but states can choose to provide benefits without using federal funds.

Currently, lawful non-citizens who meet income and other requirements are eligible to participate in Nebraska’s state-option Medicaid program, Supplemental Nutrition Assistance Program, Temporary Aid to Needy Families and aid to the aged, blind and disabled regardless of when they entered the country.

Todd Reckling, director of the division of children and family services at the state Department of Health and Human Services, testified in support of the bill.

The proposal was not made lightly, he said, but the governor determined that aid to non-citizens was a lower priority than other benefit programs. Approximately 2,000 individuals would be affected by the change, he said, and the department believes that local food banks and community health clinics could be used to replace some services.

“We believe that there are other resources available,” Reckling said.

James Goddard of Nebraska Appleseed testified in opposition to the bill, saying it would reverse sound public policy.

“These programs provide access to nutritious food and basic health care coverage,” he said. “Without these programs these individuals are likely to struggle.”

LB467, the second bill discussed, would authorize HHS to suspend Medicaid coverage for an adult member of a family receiving Aid to Dependent Children (ADC) benefits who fails to fulfill work requirements under the Employment First program.

The bill provides an exemption for women who are pregnant or have given birth in the previous 60 days, unless they refuses to cooperate in providing information on possible third-parties who may be liable to pay for care and services on their behalf.

Testifying in support of the proposal, Reckling said the bill was prompted by a 2010 Nebraska Supreme Court ruling that HHS could not withhold Medicaid benefits as a sanction for failure to comply with the state’s welfare-to-work program under current law.

Approximately 6,700 individuals participate in Employment First, Reckling said, and about 929 are sanctioned each month. Allowing HHS to suspend Medicaid coverage for those individuals would save Nebraska approximately $3.8 million per year in state and federal dollars, he said.

Goddard testified against the bill, saying removing health care from parents places an entire family at risk.

“Medicaid and ADC contribute to the well-being of Nebraska families,” he said. “They are an investment in health and economic stability.”

Aubrey Mancuso of Voices for Children in Nebraska also testified in opposition to the bill, saying it may have unintended negative consequences for children. In any given month, she said, there are over 17,000 Nebraska children whose parents are ADC recipients.

“A parent’s mental and physical health can have significant consequences for children,” Mancuso said.

Finally, LB468 would extend to Dec. 1, 2011, an existing requirement that HHS provide notice to the Legislature of proposed rules changes to the Medicaid program regarding premiums, co-payments, deductibles and limits on the amount, scope and duration of goods and services prior to the legislative session during which the changes would take effect.

Vivianne Chaumont, HHS director of Medicaid and long-term care, testified in support of LB468, saying the intent of the bill is to allow the department to establish and increase co-payments for certain Medicaid services. She outlined some of the proposed co-pay changes as follows:

• $15 per admission for an in-patient hospital stay;
• $3 for durable medical equipment over $50;
• $3 for brand name prescriptions; and
• $2 per visit for mental health or substance abuse office visits.

Funding the state’s Medicaid program will cost Nebraska $582 million in general fund dollars over the next two years, Chaumont said, and LB468 would help slow future increases.

Kathy Hoell of Arc of Nebraska testified against the bill, saying it could result in unchecked Medicaid cuts by the department.

“LB468 creates a potential for a several month period in which DHHS could make any alteration to Medicaid without legislative oversight,” she said. “This [bill] would remove the very safeguards that this committee put in place.”

The committee took no immediate action on any of the proposals.