Nebraska opens up Medicaid expansion, drops plan for restrictions

LINCOLN — State officials announced Tuesday that all Nebraskans covered by the Medicaid expansion program will get the full range of benefits, starting Oct. 1.

State officials have estimated that eventually 90,000 Nebraskans will sign up for the program.

The decision represents an about-face for Gov. Pete Ricketts’ administration and comes on the heels of a shift in policy from the Trump to Biden administrations. Ricketts had been pursuing a two-tier system of coverage since voters approved Medicaid expansion in November 2018.

Under Ricketts’ original plan, most low-income, working-age adults were to get a limited set of benefits, which included physical and mental health care and prescription drugs.

To get dental, vision and over-the-counter medications, which are covered under traditional Medicaid, applicants would have had to comply with several wellness, personal responsibility and community engagement requirements. The latter included working, volunteering or doing other specified activities for 80 hours a month.

Tuesday’s announcement means the state will provide the additional benefits without additional requirements.

State Sen. Adam Morfeld of Lincoln, who led the petition drive that put Medicaid expansion on the ballot, welcomed the announcement but noted the delay in reaching that point.

“I’m excited the governor’s office decided to honor the will of the people after three years,” he said.

The Trump administration gave initial approval to Ricketts’ two-tier plan in October last year.

But President Joe Biden’s administration made clear early this year that it would not approve the community engagement requirements.

In a Feb. 12 letter, federal Medicaid officials said that the community engagement requirements “would not promote the objectives of the Medicaid program” and that the other requirements were under review.

At the time, state Medicaid Director Kevin Bagley said the state would halt implementation process for the requirements. That left the majority of Medicaid expansion patients with no way to get the additional benefits.

The same day as Bagley’s announcement, Nebraska Appleseed filed a lawsuit on behalf of two Nebraskans challenging the two-tier system. Nebraska Appleseed attorney Sarah Maresh called the system unlawful because it created “barriers and burdens” for enrollees, in violation of the Medicaid expansion law passed by voters. A key hearing in the lawsuit has been set for Monday.

On Tuesday, even as they announced dropping the requirements, Nebraska officials described them as “a critical part of the program designed to encourage gainful employment and other opportunities.”

Although Nebraska voters approved Medicaid expansion in November 2018, the Nebraska Department of Health and Human Services did not launch the program for almost two years, the longest delay in the nation.

Coverage began in October last year. Through April, a total of 41,640 Nebraskans had enrolled in Medicaid expansion, including 31,163 who got only the basic tier of coverage.

Expanded Medicaid offers coverage for working-age adults whose incomes fall below 138% of the federal poverty level — $17,774 for a single person or $36,570 for a family of four.

The state has provided a full range of benefits to some groups covered under Medicaid expansion. Those are pregnant women, people considered medically frail and young adults ages 19 and 20.