Medicaid redesign proposed

The Health and Human Services Committee heard testimony Feb. 25 on a bill that would initiate a redesign of the state’s Medicaid program.

Lincoln Sen. Kathy Campbell, sponsor of LB472, said the proposal would increase economic efficiencies in the Medicaid program and better serve all Nebraskans. The bill would create a 16-member Medicaid Redesign Task Force composed of representatives from the Legislature, the state departments of Health and Human Services (DHHS) and Insurance and experts in health care delivery, work force, insurance, education and advocacy.

The task force would perform a review of the Medicaid program and make recommendations on cost effectiveness and quality improvement, reporting annually to the Legislature and governor.

LB472 also would require DHHS to submit a state plan amendment to the Centers for Medicare and Medicaid Services to provide coverage to a newly eligible population of adults ages 19 to 65 with incomes below 133 percent of the federal poverty level (FPL) and individuals who currently fall in a coverage gap because their income falls between 50 and 100 percent FPL, making them ineligible for federal premium assistance subsidies.

Campbell said the bill would provide access to health care on the private insurance market for approximately 54,000 Nebraskans, with costs covered by Medicaid with matching dollars starting at 100 percent in 2015 and gradually dropping to 90 percent after 2020. LB472 includes a termination clause if federal matching dollars fall below 90 percent.

“These are dollars that Nebraskans are paying to the federal government and [currently] not getting back,” she said.

Within 12 months of the bill’s passage, DHHS would be required to develop a Medicaid demonstration waiver that would coordinate health care delivery to the newly eligible population. The waiver would include:
• premium contributions up to 2 percent of income;
• a co-pay for overuse of the emergency room; and
• wellness incentives for preventive care.

Campbell said the bill incorporates lessons learned from the two previous attempts at Medicaid expansion that she has introduced—both of which stalled during floor debate.

“LB472 represents several years and months of work to understand the Affordable Care Act and the possibilities it creates for Nebraska and our economy,” Campbell said.

Marty Fattig of the Nebraska Hospital Association spoke in favor of the bill, saying 28 states have expanded their Medicaid programs and are benefitting from federal tax dollars. Failure to expand Medicaid in Nebraska would result in a loss of more than $2 billion in federal funds through 2020, he said.

Fattig said the bill incorporates innovative approaches from around the country and tailors them to Nebraska’s needs.

“LB472 is a patient-centered comprehensive plan to deliver quality care in a cost-conscious manner,” he said.

Deb Schorr, representing the Lancaster County Board of Commissioners, also testified in support, saying the bill would close the coverage gap for individuals with no means of support—whose health care costs currently fall to county governments.

“In the last four fiscal years, Lancaster County spent approximately $10 million on the medical needs of our general assistance clients,” Schorr said. “Reforming Medicaid provides an opportunity to lower property taxes by maximizing the use of federal funds.”

Courtney Miller, deputy director of Medicaid and Long-term Care at DHHS, testified in opposition to the bill. LB472 would require coverage for a new category of individuals, she said, which would increase administrative costs and place a burden on Nebraska taxpayers.

“Under this bill, nearly one in five Nebraskans would be enrolled in Medicaid,” Miller said.

Omaha pediatrician Edward Truemper also testified in opposition, saying the bill would create two populations of Medicaid eligible individuals in different programs with different rules. The result would be chaotic and place vulnerable people at risk, he said, in part due to a shortage of providers willing to accept Medicaid patients.

“Patients will also have to learn to comply with a new health care delivery model,” Truemper said. “The doctors and the patients are going to serve as guinea pigs.”

The committee took no immediate action on the bill.