LINCOLN — Two key lawmakers said Wednesday that a bill to extend publicly funded health coverage to more Nebraskans is “workable” despite a higher-than-anticipated price tag.
State Sens. Heath Mello of Omaha and Kathy Campbell of Lincoln vowed to find a way to pay for Legislative Bill 1032 without increasing state general fund spending.
But neither was ready, following the release of a legislative fiscal office analysis, to spell out how that could be done.
Campbell, the Health and Human Services Committee chairwoman, and Mello, the Appropriations Committee chairman, co-sponsored LB 1032, which was introduced by Sen. John McCollister of Omaha.
Fiscal office staff concluded the bill would cost Nebraska $111.6 million over five years and provide health coverage to 101,600 low-income people.
State lawmakers rely on the legislative fiscal office when crafting legislation.
The fiscal office number is lower than a separate estimate from the Department of Health and Human Services. An analysis done for HHS put the state cost at $153 million for those same years.
The HHS analysis said the bill would cost almost $1 billion over 10 years and cover nearly 124,000 people. The fiscal office did not make projections that far into the future.
LB 1032 is based on the Medicaid expansion program that has been offered in Arkansas since 2014.
It would provide health coverage to people who cannot qualify for Medicaid now, including able-bodied adults without minor children, parents and adults with disabilities.
Medicaid funds would be used to buy private health insurance for some people and to pay the employee’s share of insurance premiums for others.
Those who are medically frail would be covered under the regular Medicaid program.
The bill’s sponsors had planned to pay the state’s share of costs from three sources: premium contributions from enrollees, growth in premium taxes because of the new policies sold and the state’s Health Care Cash Fund.
Mello said those plans will have to be reconsidered in light of the analysis.
He said three factors made the state’s costs higher than expected.
First, Nebraska missed out on years when federal funds would have paid 100 percent of the cost for covering additional Medicaid recipients. The federal share declines, starting 2017, until it reaches 90 percent by 2022.
Next, the fiscal office raised its assumptions about the number of people who would use the coverage.
Finally, fiscal staff learned that the state would have to share the premium contributions with the federal government in the same proportion that the state and federal government would pay for the expanded coverage.
LB 1032 calls for enrollees making more than 50 percent of the federal poverty level to contribute up to 2 percent of their income for the coverage. The contributions would total $70 million over five years, of which the state could keep $5.9 million.
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