Nebraska's Stake in Medicaid Expansion
In November 2018, Nebraskans voted to expand Medicaid coverage to 90,000 neighbors who fall in the insurance coverage gap. Those in the coverage gap:
- Earn too little to qualify for subsidies to purchase coverage from the insurance marketplace and too much to qualify for traditional Medicaid;
- Are between the ages of 19 and 64 and are excluded from current Medicaid eligibility;
- Have an income at or below 138 percent of the federal poverty level, or approximately $17,000 for an individual or $35,000 for a family of four; and
- More than two-thirds of Nebraskans who fall in the coverage gap are employed.
- A greater percentage of Nebraskans who are employed but lack health insurance coverage reside in the state’s most rural counties: 12.32 percent compared to the state’s average of 11.42 percent.
The implementation of Medicaid expansion in the state currently rests with the Nebraska Department of Health and Human Services (DHHS). A timeline for enrollment has been set for October 2020 by DHHS—nearly two years after voters expanded coverage.
What does rural Nebraska have to gain from Medicaid expansion?
Rural Nebraskans are at a disadvantage in their ability to access health care coverage. As a population, rural residents are older, have lower incomes, and have a greater prevalence of chronic illnesses. Rural residents are also more likely self-employed or work in the small business sector without insurance benefits. These socioeconomic factors create barriers to access. Expanded Medicaid coverage will help mitigate some of these health disparities for rural Nebraskans.
The high percentage of uninsured rural residents has broad economic implications.
- Significant uncompensated care costs for hospitals and clinics.
- Concerns of hospital closures, and the associated loss of jobs and economic activity.
- More limited access to care for all rural residents.
- Increased insurance premiums for all residents.
Expansion benefits all Nebraskans
Medicaid expansion stands to grow the state’s economy and workforce, while improving the health of residents. These benefits are wide-ranging:
- Low-income households spend a greater share of annual income on health care than their wealthier counterparts. Nationally, health care spending accounts for 18.9 percent of annual income for the lowest income households. The wealthiest households spend only 3.9 percent of annual income on health care costs.
- Expansion will defer these health care costs for low-income residents, allowing them to spend more of their discretionary dollars in our local economies.
- Over three years, the federal share of expansion costs will stimulate more than $1.3 billion in economic activity across the state.
- This economic stimulus will support nearly 11,000 jobs annually.
- Medicaid expansion stands to reduce uncompensated care costs for Nebraska hospitals and clinics by nearly $343 million over a three-year period.
- Nearly 45 percent of the state’s 64 critical access hospitals are under financial stress. For many hospitals, the ability to provide services to Medicaid patients allows them to remain viable.
Adding jobs, stimulating economic activity, and preserving our rural hospitals increases quality of life for all Nebraskans. When our state’s economy does better and our communities are more vibrant, more Nebraskans are able to live the good life.
Implementing Medicaid Expansion in Nebraska
Last year, voters accomplished what the Legislature could not—the expansion of Medicaid coverage for 90,000 Nebraskans in the insurance coverage gap. These residents earn too little to qualify for subsidies to purchase coverage from the insurance marketplace and too much to qualify for traditional Medicaid.
- This newly eligible population is between the ages of 18 and 64, and earns an income at or below 138 percent of the federal poverty level, or approximately $17,000 for an individual or $35,000 for a family of four.
- Most importantly, people who fall in the coverage gap are our hardworking neighbors. Two-thirds of people who fall in the coverage gap are currently employed. They are working parents, farmers, servers at the coffee shop, and adult children caring for an elderly parent. Currently, they can’t access the health care coverage they need to take care of themselves and their families.
The appropriation of funds
The state’s share of Medicaid expansion costs, 10 percent, was accounted for in the governor’s budget for the biennium. The remaining 90 percent of costs will be assumed by the federal government. During the 2019 legislative session, senators approved a $49.6 million appropriation over the biennium for Medicaid expansion. This will cover the first nine months of implementation, beginning in October 2020.
There are steps that have been and must be taken by the Nebraska Department of Health and Human Services before those who are eligible may enroll under Medicaid expansion.
- The state submitted a state plan amendment to the Centers for Medicare and Medicaid Services for review on April 1, 2019.
- Centers for Medicare and Medicaid Services must approve the state plan amendment for Nebraska to be eligible for matching funds.
- The Department of Health and Human Services must set forth a benefits package.
- Necessary information systems and technology updates will need to be made, as well as the hiring and training of staff to administer the program, and the updating of contracts.
- Most expansion states began enrollment within 8 to 12 months.
When will Nebraskans be able to get coverage under Medicaid expansion?
The Department of Health and Human Services has set forth an October 2020 start date for enrollment. This is nearly two years after voters expanded Medicaid coverage, leaving tens of thousands of Nebraskans with an uncertain future.
In the meantime, 90,000 hardworking Nebraskans are still unable to access health care coverage.
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