CMS will allow Nebraska to offer extra benefits to newly eligible Medicaid beneficiaries under the state's program expansion if they agree to follow work and wellness requirements, the agency said Tuesday.
The "prime" tier will allow expansion enrollees to receive the same Medicaid benefits as Nebraska's traditional Medicaid population if they fulfill community engagement, personal responsibility and wellness activities. The "basic" package would cover basic health services and prescription drugs but drop coverage for dental, vision and over-the-counter drugs. Medicaid expansion enrollees would receive basic benefits even if they don't fulfill any of the activities required for prime benefits. In the state's proposal, Nebraska officials said almost a third of new enrollees would likely qualify for basic benefits only.
"The Nebraska demonstration is a unique model designed to provide a voluntary pathway to added benefits for certain adult beneficiaries who participate in wellness activities, as well as work and take part in other community engagement activities, which can help lift them from poverty and put them on a road to improved health and independence," CMS Administrator Seema Verma said in a statement.
In its approval letter, CMS said Nebraska's demonstration is likely to promote Medicaid's objectives because it: allows the expansion population to access additional benefits; tests whether the ability to opt into additional services lowers program costs; and tests whether the incentive structure improves health outcomes. Nebraska will have to develop a plan to evaluate the demonstration and have CMS approve it before the wellness and personal responsibility requirements take effect April 1. The work requirements go into effect in 2022.
"This demonstration applies to an important but limited population: adults who are not medically frail or pregnant, ages 21 through 64, and who are eligible under the Medicaid adult group expansion," CMS said in a statement.
Gov. Pete Ricketts and Republican state lawmakers repeatedly sought to block Medicaid expansion, but Nebraskans in 2018 approved a ballot initiative that extended Medicaid coverage to most non-disabled adults ages 19 to 64 that earn up to 138% of the federal poverty level. The state's Republican leadership opted to request a waiver from CMS in December that would allow it to create two tiers of Medicaid benefits for the newly eligible population rather than pursue a conventional Medicaid expansion.
Coverage for Nebraska's expansion population started Oct. 1 after a nearly two-year delay that brought a wave of criticism and lawsuits from advocates who thought Nebraska's leadership was dragging its feet because it didn't want the expansion to go into effect
The waiver is "clearly … an attempt to undercut that expansion," said Edwin Park, a research professor at the Georgetown University McCourt School of Public Policy.
The Trump administration has pushed states to adopt a Medicaid work requirement, claiming that such policies can improve people's health outcomes by getting them to work more. Republican-led states were eager to pursue them, but the courts have ruled against work requirements so far. Experts think Nebraska's approach could overcome potential legal challenges because no one will lose coverage under the policy, unlike other work requirements approved by the Trump administration.
According to a recent Health Affairs study, Arkansas' Medicaid work requirement for people age 30-49 did not increase employment. Researchers also found that most of Arkansas' 2018 Medicaid coverage losses—about 18,000 people lost coverage after the work requirement went into effect—reversed after a federal judge shut down the state's work requirement in April 2019. People who lost Medicaid coverage were more likely to report they had serious problems paying medical debt, put off necessary care or delay taking their medications because of cost.