With Medicaid demonstration programs that include work requirements struck down in three states, it’s become increasingly clear that such waivers may not survive legal scrutiny. So Nebraska, which last month submitted its own Section 1115 waiver application, is trying a different tactic, AIS Health reported.

In its application to CMS, the state proposes to modify voter-approved Medicaid expansion by creating two tiers of coverage: Basic, which includes “comprehensive medical, behavioral health and prescription drug coverage” as required by federal law, and Prime, which is the Basic package plus vision, dental and over-the-counter medication coverage.

“Unlike other states, everyone who meets underlying eligibility criteria will receive at least the robust Basic benefits package,” the application notes.
One of the questions surrounding Nebraska’s unique waiver request is whether it could better withstand legal scrutiny than the Arkansas, Kentucky and New Hampshire work requirements waivers, which have been blocked by federal judges, according to Patricia Boozang, a senior managing director at Manatt Health.

Rather than threatening to end Medicaid coverage for people who don’t comply with the state’s requirements, Nebraska would simply give them a less-generous benefits package, Boozang tells AIS Health.

“The courts really have to opine on that,” she adds regarding whether Nebraska’s approach is more legally permissible.

However, even if the waiver survives a court challenge, that “doesn’t mean it’s good policy,” says Jerry Vitti, founder and CEO of Healthcare Financial, Inc.

Nebraska is asking people who are very vulnerable, who often have language or literacy barriers, and who may even be transient, to comply with “a pretty burdensome requirement for that demographic,” he says. “It’s counterintuitive to me that you’re going to cut benefits for those least able to comply.”

Both Vitti and Boozang agreed that if approved, Nebraska’s waiver program could add some administrative burden for the state and, depending on how it organizes the program, its Medicaid MCOs.