Medicaid lawsuit paused as Nebraska expands benefits

LINCOLN, Neb. (AP) — A lawsuit that sought to block Nebraska from imposing a two-tiered Medicaid expansion system with more benefits for people working, volunteering or meeting other requirements is on hold after state officials said they would give all participants the same benefits.

Lancaster County District Judge Susan Strong granted a motion Friday to pause legal proceedings until Oct. 4, the first business day after everyone enrolled in Medicaid expansion will get the extra services available under the state’s premium plan, the Omaha World-Herald reported.

The motion was filed after an agreement between the Nebraska Department of Health and Human Services, which administers the state Medicaid program, and Nebraska Appleseed, a Lincoln-based advocacy group that filed the lawsuit. State officials announced recently that they would abandon plans for a limited tier of coverage for most Medicaid expansion patients.

According to the motion, the department must give monthly reports to Nebraska Appleseed and the court about its progress in meeting its Oct. 1 goal for launching the additional services. If the services are implemented on time, the lawsuit may be dismissed.

Most low-income, working-age adults would have gotten a more limited set of benefits under Republican Gov. Pete Ricketts’ original Medicaid expansion plan, but they still would have been eligible for physical and mental health care and prescription drugs.

Applicants who were working, volunteering, caring for a relative or doing other activities at least 80 hours a month would have qualified for coverage of three additional benefits: vision, dental and over-the-counter medications.

Nebraska voters expanded Medicaid in a 2018 statewide referendum, despite opposition from Ricketts and other prominent conservatives. State officials opened the program for enrollment nearly two years later, arguing that they needed time do implement it correctly. The unusually slow rollout drew criticism from program backers, who said the state was taking too long.

President Donald Trump’s administration gave initial approval to Ricketts’ two-tier plan in October. But President Joe Biden’s administration made clear that it would not approve the community engagement requirements.

Expanded Medicaid offers coverage for working-age adults whose incomes fall below 138% of the federal poverty level — $17,774 for a single person or $36,570 for a family of four.