The accepted wisdom, particularly in rural states, is that Medicaid expansion drastically cuts uncompensated care rates and cushions often razor-thin margins for hospitals. Nebraska has fewer than 2 million residents. They live in small agricultural towns dotting the prairies or one of two major cities—Lincoln and Omaha.
Regionally, uninsured rates are often in the double digits and in one very rural county the uninsured rate is 40%.
Of the Nebraska Hospital Association's 90 hospitals, 64 are critical-access. On paper, the hospitals' financial outlook with expansion should fit into the narrative for other rural parts of the country, although the regional demographics vary from those in states like Kentucky or Georgia. But since Obamacare was launched, the examples of expansion state providers tell a more nuanced story, Hale said.
The largest eligible population for Medicaid expansion—nearly 23,000 uninsured adults under Medicare age—is in Douglas County, home to Omaha, the state's largest city.
Nebraska's Department of Health and Human Services estimated the state would likely lose some revenue from a tax on insurance premiums, as some people would likely move from private coverage to expanded Medicaid.
In theory, expansion looks like a "windfall" for hospitals, Hale added. "But when I talk to our CFOs, that's not the case."
By 2020, states will pay 10% of the share in expansion. Nebraska could follow the example of other states that have looked to the providers to cover that cost. That could affect hospitals' bottom lines depending on how many people enroll in Medicaid and use their coverage to get early or preventive treatment so hospitals aren't left with high uncompensated-care costs.
Instead of a provider tax, hospitals want a tobacco tax similar to the levy Montana has proposed and California has implemented. California has also imposed a provider tax. Nebraska's share of the projected 10-year $5.5 billion expansion expense would be about $592 million, according to a September estimate from the state's Department of Health and Human Services.
Democratic state Sen. Adam Morfield, who introduced an expansion bill to the Legislature in 2017, said it's too early to determine how the state should pay for its share. He wants to see the measure passed first.
GOP Gov. Pete Ricketts, for years a vocal critic of expansion, is running for re-election this cycle and has not taken a public position on the ballot measure. A spokesperson did not respond to a request for comment.
But Morfield said that in the past several years of debate Ricketts and the state's expansion opponents haven't come up with other ways to address the uninsured rates beyond additional grants to community health centers for direct primary care.
"If you don't have money for insurance, you don't have money for direct primary care," Morfield said. "There are no other solutions. The only solutions are market controls that aren't tolerated by conservatives."
About 78,000 uninsured Nebraskans fall under the Medicaid expansion income eligibility line of earning 138% of the federal poverty level. Of these, about 67,000 are adults who could enroll, according to data from the U.S. Census Bureau's 2016 American Community Survey and analyzed by Modern Healthcare. The average percentage of Nebraska adults who could gain coverage statewide if the initiative passes is 3.6%, although that rate changes depending on the county, from less than 1% of the local population to more than 10%.
These numbers vary from the state's figures. Based on state economic data, Nebraska's health department estimates more than 93,000 people would enroll in Medicaid expansion over the next decade. Most reports predict more than 90,000 Nebraskans would gain coverage.
How new Medicaid enrollments would impact hospital margins also could vary widely by county.
Sparsely populated Keith County, where just over 8,000 people live, has an 18-bed critical-access hospital and about 900 uninsured adults under Medicare age. Fewer than 350 people would qualify for expanded Medicaid.
Sarpy County has about 168,000 residents and two big hospitals—a 121-bed Catholic Health Initiatives hospital and 91-bed Bellevue Medical Center. Nearly 8,300 of the county's adult residents are uninsured. Nearly 2,800 would qualify for expanded Medicaid.
The argument for bolstering rural hospitals helped to drive the state's momentum for expansion, which, according to internal polling, enjoys comfortable majority support.
Meg Mandy, who manages the expansion campaign for the state-based group Insure the Good Life, said rural Nebraskans grasped the idea of coverage gaps and financial problems for providers.
"So much of what drives the economy outside (Omaha and Lincoln) is agriculture-based, with no employer insurance," Mandy said. "Small-business owners can't afford to provide insurance and aren't required to. So it's just thinking through what being uninsured means outside the metropolitan and urban areas—larger out-of-pocket costs and uncompensated care, and it has put hospitals and clinics in the rural parts of the state in a bad position."
The other argument top-of-mind for states who haven't expanded is the idea that they are subsidizing coverage in other states.
State Sen. John McCollister, a moderate Republican who has also introduced a bill to expand, made this point earlier this month in the first of three mandatory public hearings on the ballot initiative.
"Right now, we send hundreds of millions of our tax dollars to Washington, D.C.—money that gets spent on all sorts of things—all around this country," McCollister said. "For the last few years, we've had the opportunity to bring nearly $600 million of our tax money home every year to help Nebraskans get healthcare. Unfortunately, we've left that money on the table and watched while 33 other states brought money home to help residents in their states instead."
The ballot initiative, backed by a coalition that includes the Nebraska Hospital Association, the state's AARP and ACLU chapters and the Center for Rural Affairs, has already survived two court challenges.
In July, Republican state Sen. Lydia Brasch and former state legislator Mark Christensen sued the secretary of state and Insure the Good Life, claiming that the initiative's wording violated state law. A district court tossed the original lawsuit and the state Supreme Court tossed the appeal in September.
