Medicaid cost-sharing limitations amended, advanced

A bill that intended to place limitations on out-of-pocket expenses for Medicaid recipients was narrowed and advanced to select file April 2.

LB929, as introduced by Omaha Sen. John Fredrickson, would prohibit the state Department of Health and Human Services from imposing deductibles, co-insurance, copayments or similar cost-sharing charges on Medicaid enrollees unless required by federal law.

It also would require DHHS to set new copayments required under the One Big Beautiful Bill Act of 2025 at the federal minimum, allow managed care organizations to pay those charges on behalf of enrollees and prohibit providers from denying care to an enrollee who fails to pay a required charge.

Fredrickson said federal law requires Medicaid expansion enrollees with incomes between 100% and 138% of the federal poverty level to pay copays of up to $35 for nonexempt services, while allowing states to determine the exact amount.

The requirement makes it challenging for DHHS to administer and collect charges, he said, and creates uncertainty for enrollees, which can deter individuals from seeking necessary medical care.

A Health and Human Services Committee amendment, adopted 29-8, would replace the bill with a narrowed proposal.

The amendment instead would allow Medicaid managed care organizations to cover out-of-pocket costs, such as deductibles or copayments, on behalf of Medicaid enrollees to the extent allowed under federal law.

Fredrickson said managed care organizations began covering out-of-pocket expenses for Medicaid enrollees in 2024 to ensure cost would not be a barrier to care. The amendment simply would place permissive authority in state law for that practice to continue, he said.

“Copays are associated with financial barriers, delayed treatment and worse health outcomes,” Fredrickson said. “This [proposal] simply allows the state’s managed care organizations to cover the cost of any copays, similar to how they have done previously.”

Sen. Beau Ballard of Lincoln supported the bill and committee amendment, which he said would provide clarity to providers and managed care organizations following policy changes at the federal level.

“[MCOs] already have the option to do this, this is just providing a bit more guidance,” Ballard said.

Omaha Sen. Kathleen Kauth opposed the measure. She expressed concern that removing the responsibility for Medicaid enrollees to pay for their own care could result in an overuse of services, greater reliance on government support and an increased burden on taxpayers.

“When we start removing responsibilities from people, we create dependency … [and] once you create dependency, it creates an entitlement,” Kauth said.

Following adoption of the committee amendment, LB929 was advanced to select file 28-9.