For this year and the following two years, the federal government is fully funding the expansion population for states that opt into the program. States can join at any time, but the 100 percent federal match starts going down after 2016, though it won’t drop below 90 percent.
That has left expansion supporters in red states this year trying to figure out how to design the program in a way that could earn Republican votes. The Nebraska bill, which would cover about 54,000 low-income people, borrowed from conservative Medicaid expansion approaches pioneered by Arkansas and Iowa.
“What we began to look at is what would work in the state of Nebraska,” said state Sen. Kathy Campbell, the bill’s sponsor. “We built the [bill] using bits and pieces from waivers we knew that had been accepted by the federal government.”
While the Nebraska bill would enroll everyone in the adult expansion population under the federal poverty level in the traditional Medicaid program, those earning up to 133 percent FPL – the start of eligibility for Obamcare exchange coverage – would get federal dollars to purchase private health insurance plans. The bill also included wellness incentives and reforms to the health care delivery system.
State Sen. Mike Gloor, a former hospital CEO, said he opposed last year’s Medicaid expansion bill because it was “too simplistic,” but he supported this year’s revised version because of its reforms to the delivery system.
“What they came back with is a completely different bill and one that’s transformational,” Gloor said during floor debate.
However, the bill sponsored by state Sen. Kathy Campbell was defeated 27-21 in a Wednesday cloture vote after needing 33 votes to advance. Nebraska rules prevent a bill from coming up again after a failed cloture vote.
Supporters say the bill, priced at about $60 million over six years, would have been offset by a projected $2.3 billion in revenue the expansion would have generated for the state over the same time.
“The opposition’s speculation and unfounded conjecture have placed the lives of hundreds of working Nebraskans at risk and jeopardized the health of thousands more," the Nebraska Hospital Association scolded in a statement after the vote. Nebraska’s hospitals, major supporters of the expansion bill, have warned they’re facing financial pressures from about $1.3 billion in Medicare cuts over the next decade because of Obamacare, sequestration and other factors.
Campbell said she’s now pinning her hopes on a new governor and more favorable numbers in the state legislature in 2015. But today’s vote showed that Nebraska has some ways to go before it will accept a major piece of Obamacare.