A bill aimed at limiting out-of-pocket costs for Medicaid recipients in Nebraska was significantly narrowed before advancing in the Legislature on Thursday.
Senator John Fredrickson of Omaha – District 20 (Photo: Nebraska Unicameral Information Office)
The personal priority bill of Sen. John Fredrickson of Omaha, LB929, originally sought to bar the state Department of Health and Human Services from imposing deductibles, coinsurance, copays or similar cost-sharing charges on Medicaid enrollees unless required by federal law. Additionally, new copays set by the state could not exceed a limit outlined in the 2025 federal budget reconciliation bill, the so-called One Big Beautiful Bill Act (OBBBA), and providers would be prohibited from denying care for non-payment.
These changes would have taken effect alongside Medicaid changes outlined in the OBBBA, on October 1, 2028.
Each of these provisions were stricken from LB929 during the first round of debate Thursday after lawmakers voted 29-8 to adopt a Health and Human Services Committee amendment which removed 80% of the bill’s provisions.
The lone survivor: Managed Care Organizations (MCOs)—private insurers that administer Medicaid benefits under contract with the state—would be allowed to cover deductibles and cost-sharing fees for Medicaid enrollees if they so chose.
Under the OBBBA, states must charge copays up to $35 per-service for adults with household incomes between 100% and 138% of the federal poverty line. The federal law also maintains a cap on out-of-pocket costs at 5% of household income.
Fredrickson said MCOs in Nebraska began covering out-of-pocket expenses for Medicaid enrollees in 2024 to ensure costs would not be a barrier to care. These costs were often “nominal,” sometimes as low as $5. The amended bill simply clarifies and cements an MCO’s ability to continue doing so.
“Copays are associated with financial barriers, delayed treatment and worse health outcomes,” Fredrickson said. “This [proposal] simply allows the state’s managed care organizations to cover the cost of any copays, similar to how they have done previously.”
Senator Kathleen Kauth of Omaha – District 31 (Photo: Nebraska Unicameral Information Office)
While the committee amendment pared back most of LB929’s initial goals, Fredrickson encouraged its adoption in a compromise to eliminate potential future costs to the state, as well as address opposition from DHHS.
Sen. Kathleen Kauth of Omaha opposed the measure, even as amended, arguing that removing cost-sharing responsibility could reduce “skin in the game,” leading to overuse of services and higher costs for taxpayers.
“We’ll still have copays and cost-sharing as required by federal law,” Fredrickson responded. “This doesn’t require the MCOs to cover them, it just allows them to cover them should they choose to do that.”
“In the long run, we saw that it was more expensive to the State for Nebraskans to put off care, as opposed to being proactive with care,” he added.
Following adoption of the amendment, LB929 advanced on a 28-9 vote and now heads to two more rounds of debate. Thursday was Day 55 of the 60-day session.