Medicaid expansion proposed

The Health and Human Services Committee heard testimony Feb. 28 on a bill that would require Nebraska to opt-in to expanded Medicaid coverage available under federal health care reform.

LB577, introduced by Lincoln Sen. Kathy Campbell, would require the state Department of Health and Human Services (DHHS) to add the adult population newly eligible under the federal Patient Protection and Affordable Care Act (ACA) to the state’s Medicaid state plan amendment.

Under the ACA, low-income adults ages 19 to 65 with incomes of up to $15,856 would be eligible for Medicaid if a state chooses to extend benefits to them, Campbell said.

Expanding Medicaid to this group would be a good financial move for the state, Campbell said, because it would allow Nebraska to cover the newly eligible adult population with 100 percent federal funding from 2014 to 2016. Federal funding would decrease incrementally, she said, leveling off at 90 percent starting in 2020.

The uncompensated hospital care individuals in this income group already receive creates higher medical bills and insurance premiums for all Nebraskans, Campbell said.

“We are already paying for the expenses related to not covering health care for low income adults,” Campbell said. “LB577 is a smart investment. It is a way to stop writing a blank check for the ever increasing costs that we all pay.”

Campbell said states are allowed to choose a benchmark benefit plan for the newly eligible adult population under the ACA. One of the options, known as the secretary-approved benefit plan, allows states to include the Medicaid benefit package currently offered in the state.

LB577 would direct DHHS to request the secretary-approved benefit plan and to include the mandatory and optional coverage under traditional Nebraska Medicaid. The bill also would specify that the benefit plan comply with the requirements of the Mental Health Parity and Addiction Equity Act and include habilitative services as provided by the ACA.

Rowen Zetterman of the Nebraska Medical Association testified in support of the bill, saying access to quality medical care is a social good that benefits all Nebraskans.

People without health care coverage are less likely to receive preventative care, he said, and have a 25 percent higher mortality rate than those with coverage.

“Medicaid expansion will provide routine and preventive care to more Nebraskans,” Zetterman said. “Why would we consider turning down such an important opportunity?”

Sharon Lind, representing the Nebraska Hospital Association, also supported the bill. Nebraska hospitals lose hundreds of millions of dollars a year in uncompensated care to individuals without coverage, she said, and those costs are passed on to all Nebraskans.

“The current model is not sustainable,” Lind said.

Jon Bailey, director of research and analysis at the Center for Rural Affairs, testified in support of LB577. He said research shows that 75 percent of businesses in rural Nebraska do not provide health insurance coverage to their employees.

One in five households in rural Nebraska would qualify for Medicaid under the bill, Bailey said.

DHHS Medicaid director Vivianne Chaumont testified in opposition. She said an expansion that could add 55,0000 individuals to the state’s Medicaid program would increase pressure on financing and infrastructure.

Providing Medicaid coverage to one of every five Nebraskans could limit access to care, she said, because providers already are reluctant to serve Medicaid patients due to low reimbursement rates.

In addition, Chaumont said, other mandatory provisions in the ACA will add approximately 48,000 Nebraskans to the Medicaid rolls through 2020.

“We’re going to experience a large increase in our population even without expanding Medicaid,” she said.

The committee took no immediate action on the bill.