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Nebraska ‘Walks a Fine Line’ With Work for Health Benefits Rule

Nov. 2, 2020, 10:02 AM

A Nebraska Medicaid plan that offers extra health benefits to enrollees who meet work and wellness requirements has a fair shot at surviving court scrutiny and could serve as a model for other states seeking to expand their programs, analysts say.

Work requirements for the low-income Medicaid population have met stiff headwinds in the court—four states now have seen them struck down. But Nebraska officials have taken a different approach by limiting their reach to dental, vision, and over-the-counter drug benefits—benefits that states aren’t required to provide under the Medicaid statute.

Nebraska enrollees who don’t meet the requirements will still receive the plan’s broad range of basic benefits, unlike proposals in other states where failure to meet work requirements would result in a loss of all benefits.

That difference makes the Nebraska plan “more of a carrot than a stick,” and could make it acceptable to the courts, Mark Hall, director of the Health Law and Policy Program at Wake Forest Law, said.

“The Nebraska plan strikes me as a creative, innovative approach to dealing with the obstacles that other states have faced in court,” Hall said. “And it could be a middle ground that would work for states that have been unwilling to expand their Medicaid programs so far.”

The Centers for Medicare & Medicaid Services Oct. 20 approved final details of Nebraska’s plan to expand Medicaid enrollment to adults with incomes up to 138% of the federal poverty level. The entire expansion population is eligible for essential health-care services such as ambulatory and emergency room care. But the new plan allows enrollees to earn additional health benefits by engaging in such activities as working, volunteering, keeping medical appointments, and seeing a doctor yearly.

Nebraska officials say the expansion will bring an additional 90,000 people onto the rolls of the Medicaid program, which had around 221,000 enrollees in June.

Work Requirements

Supporters of proposals to condition health-care coverage on completion of work and wellness requirements say those requirements help enrollees make the transition to independence and self-reliance.

Critics say most adult Medicaid enrollees are already working, and the requirements act more as a barrier to health care than an on-ramp to independence.

They also say work requirements conflict with the central purpose of the Medicaid statute, which is to provide health-care coverage rather than encourage people to work, according to Jeff J. Wurzburg, a member of the health-care practice group at Norton Rose Fulbright US LLP.

And the courts have agreed.

“The courts so far have been very clear that providing coverage is the primary objective of Medicaid, and that you can’t prioritize a non-statutory objective to the exclusion of the statutory objective,” he said.

Eighteen other states sought approval from the CMS for work requirements as part of their Medicaid expansion proposals, according to the National Academy for State Health Policy.

But the U.S. District Court for the District of Columbia has thrown out work requirement proposals in four states—Arkansas, Kentucky, Michigan, and New Hampshire—on those grounds.

The U.S. Court of Appeals for the District of Columbia Circuit rejected the Trump administration’s bid to restore the work requirements in Arkansas. No state work requirements are currently active.

‘A Fine Line’

The Nebraska plan “walks a fine line” in its attempt to find a place for work and wellness requirements that don’t infringe upon what the courts have stressed is the statutory purpose of the program, Wurzburg said.

“This is a more limited approach,” he said. “It doesn’t restrict eligibility for most health-care benefits, and it focuses on providing additional benefits for those who are willing to take these additional steps, meet these additional requirements.”

It’s still an open question whether the courts will buy the Nebraska argument, he said.

Sidney Watson, director of the Center for Health Law Studies at the Saint Louis University School of Law, said there’s a good chance the plan could be thrown out on state law grounds.

That’s because it flouts the text of the Medicaid expansion ballot initiative Nebraska voters approved in 2018, which said the state would impose no greater burdens or restrictions on eligibility, benefits, or access to health care services than in traditional Medicaid, she said.

“My reading is that, if the benefits are being provided to adults in traditional Medicaid, which these benefits are, then they can’t be denied to the Medicaid-expansion population,” she said.

Optional Approach

The Nebraska experiment, if it succeeds in the courts, could provide a template for other states seeking to make room for “individual responsibility elements” in their Medicaid programs, Hall said.

“The key thing would seem to be to develop a kind of optional approach, where the requirements apply to additional benefits, rather than using them to take benefits away,” he said.

A court-sanctioned form of work requirements could be attractive to states that have been unwilling to expand Medicaid so far, giving them a way to add a conservative flavor to a policy development that has been seen as “from the left,” he said.

Ten states have yet to expand their Medicaid programs since the 2010 passage of the Affordable Care Act.

“The Nebraska plan could offer a kind of middle ground where the political forces could meet in the middle,” he said. “For folks who have opposed Medicaid expansion, it could seem like a compromise position that would allow them to move forward.”

Allowing the Nebraska plan to go forward also would provide a test as to whether the “juice was worth the squeeze,” said Wurzburg.

“If the results from this experiment showed that the plan promoted the objectives of Medicaid, that people were able to meet the requirements and get additional benefits, that would help a future administration in arguing that work requirements can make a positive contribution,” he said.

“But it could very easily go the other way, and show that it wasn’t worth the administrative cost and hassle, and end up acting as a barrier to coverage,” Wurzburg said.

To contact the reporter on this story: Christopher Brown in St. Louis at ChrisBrown@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com

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