LINCOLN — The two-tier Medicaid system that officials are proposing as a way to cover more low-income Nebraskans would be unique to the state.
The Heritage Health Adult system would include work, wellness and personal responsibility requirements, many of which have been tried by other states. However, the combination of requirements and the penalties for failing to meet requirements would be new.
As outlined by state officials, people would not get dental, vision and over-the-counter medication coverage if they fall short on any of the requirements. But they could still keep physical, medical and prescription drug coverage. Reviews would be done every six months to determine compliance.
“This is a very Nebraska-specific program that we have put forth,” Matthew Van Patton, the state Medicaid director, told lawmakers recently. “Nobody under this model loses benefits.”
The Nebraska Department of Health and Human Services put forth Heritage Health Adult in response to voter approval of a state law expanding Medicaid to about 94,000 more low-income people.
To implement the proposed system, Nebraska will have to get federal approval to waive traditional Medicaid rules.
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Robin Rudowitz, vice president of the Kaiser Family Foundation, which tracks such waivers, said the Nebraska approach would be different from waivers that have been implemented around the country. But it would share some features with waiver programs tried in other states, including Indiana and Iowa.
The most-common shared feature would be Nebraska’s plan to end retroactive eligibility for most Medicaid patients. The change would mean coverage starts in the month a person applies for Medicaid. Under current regulations, coverage goes back three months before the application date.
Here are some lessons that can be drawn from other states’ experiences:
No state has work requirements in effect for Medicaid recipients. Nearly 20 states are in various stages of trying to establish work requirements for Medicaid recipients, with encouragement from the Trump administration. Nine states are in the process of trying to get federal approval.
In three states, the requirements were blocked by courts, which have ruled that they undermine Medicaid’s mission of providing health care for the needy.
Six states have federal approval but have not implemented the requirements. Two of the six, Arizona and Indiana, voluntarily suspended implementation efforts. Arizona officials cited the court decisions in other state. Indiana’s requirements are facing a legal challenge.
Other states would suspend benefits or cut eligibility for falling short on work requirements. All other states seeking to implement work requirements have proposed suspending benefits or dropping people from Medicaid if they fail to comply with the requirements. The states vary in how long the suspension or loss of eligibility would last and how people could regain benefits.
Nebraska is proposing to limit, not suspend, benefits. State officials have touted that difference. Van Patton called it a “mark of distinction” among other states.
But the requirements look similar otherwise. All states, including Nebraska, would accept a variety of activities as meeting the work requirement, such as education, internships, substance abuse treatment, job searches and volunteer work.
All would exempt certain groups from the requirements. Commonly exempt are pregnant women, people with serious mental illnesses and family caregivers.
Wellness incentives have had limited success in other states. A handful of other states, including Iowa, have incorporated some wellness incentives and penalties into their Medicaid waivers, as Nebraska is proposing to do.
Nebraska would provide additional benefits to people who meet all of the wellness requirements — taking a health risk screening and an assessment of social determinants of health, filling prescriptions, having lab work done, going in for an annual doctor visit and choosing a primary care provider.
But only limited numbers of people have completed wellness activities in other states.
Michigan offers a $50 gift card to Medicaid patients below the poverty line or a reduction in future premiums to those above poverty who complete a health risk assessment. A 2017 Kaiser study found that just 16% had done the assessment.
In Iowa, Medicaid patients can avoid paying small monthly premiums by getting a yearly exam and doing a health risk assessment. But state reports show that fewer than one in four complete both requirements.
Ending retroactive eligibility would increase costs for patients and providers. Eight states, including Iowa, have won federal approval to end retroactive eligibility, according to the Kaiser waiver tracker. The courts have put the change on hold in three of those states.
Von Patton said Nebraska is proposing the change to make Medicaid more like commercial insurance and to encourage people to sign up before they get sick. The change would affect people newly eligible for Medicaid because of expansion and people previously eligible for Medicaid, with some exemptions.
Critics said that ending retroactive eligibility hurts health care providers as well as patients. Retroactive eligibility means that doctors and hospitals get paid for care provided to people who qualify for Medicaid but have not yet enrolled, while patients are not faced with medical debt.
The change can save money for state Medicaid programs. When Iowa launched its change, officials estimated a savings of more than $36 million a year from ending retroactive eligibility for up to 40,000 people.
No other state has the same system of six-month benefit reviews. Nebraska appears to be alone in proposing reviews every six months to determine whether patients will get the basic tier of benefits or qualify for the premium tier, which includes dental, vision and over-the-counter medications.
Rudowitz said she doesn’t know of another state with such a requirement.
Nebraska officials originally wanted to determine eligibility for Medicaid every six months, not just review a patient’s benefit tier. But federal law requires annual determinations. The state backed away from the more frequent eligibility determinations after talking with federal officials.
Now, Van Patton said, the state will stick with annual eligibility determinations, with periodic checks to verify that people still qualify for Medicaid. In addition, there will be reviews every six months to see whether patients are meeting the requirements for the premium benefits.
He told lawmakers that Nebraska’s approach would lead to better and more cost-effective outcomes, while avoiding potential penalties for enrolling people who do not qualify for Medicaid.
“This is our best hope for bending the cost curve to build a sustainable program,” he said.