Legislature advances bill limiting copays for Medicaid recipients

LINCOLN — In a 28-9 vote, the Legislature gave first-round approval to a bill putting limitations on copays paid by Medicaid recipients.

Introduced and prioritized by Omaha Sen. John Fredrickson, the bill (LB929) allows managed care organizations to cover copays for Medicaid recipients and sets limits on the cost-sharing measures authorized by Congress last year.

Managed care organizations, which include private insurance companies, contract with state agencies to deliver Medicaid benefits at a fixed cost.

"We still will have copay and cost sharing as required by federal law. With this, we would just go back to what we previously did as a department, which was to allow for MCOs to cover those costs, so they choose. This doesn't require MCOs to cover them," Fredrickson said.

In Nebraska, Medicaid discontinued copayments on May 1, 2024. Following a waiver period during the pandemic, Managed Care Organizations in the state restarted cost sharing on June 1, 2024, with copays typically ranging from $1 to $15 per service.

With the passage of President Donald Trump's One Big Beautiful Bill Act, states are now authorized to impose new Medicaid copayments of up to $35 per service for Medicaid expansion adults with incomes between 100% and 138% of the federal poverty line.

In Nebraska, 138% of the federal poverty level translates to roughly $21,600 per year for an individual and $44,556 for a family of four. At the federal poverty level, annual income is about $15,960 for an individual and $33,000 for a four‑person household.

Fredrickson said copays can often deter people from getting the medical care they need and that this legislation will ensure Nebraskans on Medicaid can receive "basic necessities" at a more affordable cost.

In a 29-8 vote, lawmakers passed a Health and Human Services amendment that chairperson Sen. Brian Hardin of Gering said "significantly narrowed" the bill by removing most of the protective language.

"In short, the amended bill is a single, straightforward clarification that managed care organization may step in to cover cost-sharing charges for their Medicaid members when federal law allows it," Hardin said, as opposed to requiring copay coverage.

Sen. Robert Clements of Elmwood opposed the bill saying the state already has "way more than the basic requirements" for Medicaid that are "already pretty generous."

"I prefer just to follow the federal guidelines," Clements said. "Asking for a modest copay is the least one thing to do."

While the fiscal note estimated the bill would cost the state $2 million in fiscal year 2026-27, Fredrickson and Hardin said the committee amendment removes that cost.