Nebraska Lawmakers to Decide Medicaid Expansion a Fourth Time

Published February 23, 2016

State Sen. John McCollister (R-Omaha) has proposed a bill that would expand Medicaid in Nebraska by allowing many people above the federal poverty line to purchase private health insurance using federal dollars.

The state’s unicameral legislature has declined three years in a row to raise the qualifying income threshold for Medicaid, a change allowed by a provision in the Affordable Care Act. This round, the Transitional Health Insurance Program Act (LB 1032) takes a different approach.

“It’s a public-private partnership where Medicaid administers eligibility and funding but private insurance companies manage the risks and payments,” McCollister told Health Care News.

The bill states, “It is necessary to improve the health of and health care coverage for uninsured individuals in Nebraska in a manner that utilizes the private health insurance market, emphasizes personal responsibility, leverages insurance offered by employers and private insurance companies, and strengthens Nebraska’s health care system as a whole.”

Arkansas, a Cautionary Tale

Some Nebraskans read the bill differently. In his State of the State Address, Gov. Pete Ricketts (R) called Medicaid expansion “one of the biggest long-term risks” to Nebraska’s budget.

In a weekly column for the governor’s website, Ricketts added, “While this is a new plan, it’s the same story. Medicaid expansion is an expensive and an unreasonable risk to Nebraska taxpayers.”

Ricketts then compared the proposed bill’s expansion model to the one Arkansas implemented in 2014: “After just six months, the Arkansas expansion was $137 million, or 61 percent, over budget. One of the reasons was because more people signed up than projected. State officials in Arkansas predicted a maximum of 215,000 able-bodied adults would enroll in Medicaid, but after a year and a half that number had surged to almost 300,000. After the surge, more than 40 percent of Arkansas citizens were on Medicaid, making Arkansas one of the most Medicaid-dependent states in the nation.”

“Furthermore, purchasing private insurance with federal dollars costs around $1,700 more per person each year than traditional Medicaid in Arkansas,” wrote Ricketts.

‘Unaffordable and Unpredictable’

In another response to McCollister’s plan, the Platte Institute for Economic Research examined nearby Arkansas’s Medicaid expansion. In Arkansas’ Failed Medicaid Experiment: Not a Model for Nebraska, Jonathan Ingram and Nicholas Horton write, “This new approach to Medicaid expansion is unaffordable and unpredictable, pushes adults out of private insurance and into taxpayer-funded welfare, puts the truly needy on the chopping block, discourages work, and shrinks the economy.”

McCollister, who used to work for the Platte Institute, says the Arkansas plan Platte analyzed is outdated, and he says Arkansas is reworking its expanded Medicaid plan.

“We took the best features from the new model and put it in the proposed one for Nebraska,” McCollister said, although he did not specify which of Arkansas’s failed features the Nebraska plan would exclude.

Nebraska lawmakers will decide the issue a fourth time during this year’s legislative session, which ends April 20.

Michael McGrady ([email protected]) writes from Colorado Springs, Colorado.

Internet Info:

Jonathan Ingram and Nicholas Horton, Arkansas’ Failed Medicaid Experiment: Not a Model for Nebraska, The Platte Institute for Economic Research, January 2016:

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