From her post in the neonatal intensive care unit at Children’s Nebraska, Dr. Ann Anderson-Berry sees some of Nebraska’s sickest and smallest patients.
It’s a devastating and unexpected end to a pregnancy, where the baby’s survival is often in question. For parents who rely on Medicaid, the government insurance program for low-income and disabled Americans, filling out the pages of paperwork to get their newborn covered is rarely top of mind.
“It’s just too tenuous to go home, or to think about paperwork,” said Anderson-Berry, division chief of neonatology at Children’s Nebraska. “And so, sometimes these applications are not submitted in the first days or even the first couple of weeks after delivery.”
Those families — and other Medicaid-eligible patients seeking emergency care — have long had a grace period to apply, because by law, Medicaid would go back and retroactively pay for three months of care before the application.
Nebraska’s Department of Health and Human Services is now seeking to end that retroactive coverage altogether.
If adopted, Nebraska would be the only state in the country to entirely eliminate retroactive coverage, including for children and pregnant women. Ten other states currently have reduced retroactive coverage, though they all have some exceptions for certain groups or allow a longer coverage period than what Nebraska has proposed, according to KFF’s Medicaid Waiver Tracker. DHHS is currently accepting public comment on the proposal.
State officials argue the move will save Nebraska millions of dollars each year, and it will incentivize hospitals to quickly enroll Medicaid-eligible patients.
But health care officials, advocates and some lawmakers say the move will do more harm than good, and that harm will fall on an already stressed health care system and on the state’s most vulnerable residents — low-income Nebraskans needing urgent and costly care.
“It’s cruel and it’s a money grab in my opinion … it’s placing an administrative burden to help save the state money at the expense of everybody else in the health system,” said Justin Wolf, CEO of Memorial Community Health hospital in Aurora.
Medicaid enrollees in Nebraska would still be covered within the calendar month that they applied for care, but if a person experienced a medical emergency toward the end of February, for example, and wasn’t able to submit the application until March 1, none of their care in February would be covered.
For patients in an emergency, those first days of care are often the most expensive. A NICU baby’s regular care costs about $4,000 per day, Anderson-Berry said. A baby with extremely low birth weight can have hospital bills well over $1 million.
Eliminating retroactive coverage won’t just impact Medicaid-eligible newborns and their families. Any low-income Nebraskan with an emergency — who gets in a bad car accident or has a heart attack — could be unable to finish their application by the last day of the month.
“Plan your heart attack for the first week of the month,” Anderson-Berry said.
Medicaid retroactive coverage is intended to prevent low-income people from going into severe and crippling medical debt, said Sarah Maresh, health care access program director at Nebraska Appleseed.
It also protects hospitals and providers by making sure they will be paid for care, Maresh said, especially in catastrophic situations like a traumatic car accident, where hospitals must provide care regardless of whether a patient has insurance.
Ending that retroactive coverage will create a financial incentive for hospitals to be “timely and thorough” when helping patients complete Medicaid applications, because the majority of costs will be shifted to hospitals, DHHS Chief Financial Officer John Meals said at a legislative hearing in February.
But hospitals already spend a lot of money actively engaging with patients to help them enroll in Medicaid or private insurance, said Jeremy Nordquist, CEO of the Nebraska Hospital Association. Still, there’s a portion of the population that hospitals can’t reach until they’re brought in as emergency patients.
“We do the best we can with folks who come in our door … putting this burden on hospitals to go out and constantly do Medicaid enrollment just doesn’t work with the resources that hospitals have available,” Nordquist said.
Nebraska DHHS officials declined to be interviewed for this story. A spokesman said DHHS leadership was busy with legislative and budget discussions.
Even without action by the state, the window for retroactive Medicaid coverage is already slated to narrow.
President Donald Trump’s 2025 tax and spending bill, often called the “One Big Beautiful Bill,” cut the existing three full months of retroactive coverage to one month for the Medicaid expansion population and two months for traditional Medicaid enrollees like children and disabled adults. The Medicaid changes take effect Jan. 1, 2027.
DHHS is applying for a five-year waiver that will go beyond the federal changes. Nebraska plans to set retroactive coverage to zero months, effective Oct. 1, Meals told lawmakers last month.
Unlike the federal changes, though, Nebraska’s proposed cuts would be across the board.
“They’re proposing to eliminate it for every Medicaid population, including people with disabilities, nursing home residents, pregnant folks, Medicaid babies and children,” Maresh said.
Other states have already reduced retroactive eligibility, though they ultimately carved out exceptions.
In 2017, Iowa did something similar to what Nebraska is proposing and eliminated all retroactive coverage, except for pregnant women and infants. But the state eventually added more exemptions for children and long-term care residents after facing pushback from nursing homes because of the financial strain, Maresh said.
DHHS estimates that ending retroactive coverage will save the state between $18 million and $21 million each year during the five-year waiver.
But Nordquist said those savings will cost the state federal matching dollars for health care — the federal government pays between $1 and $9 for every $1 the state spends on Medicaid.
Bryan Health, which operates six hospitals in the state, estimates that its hospital system will lose about $35 million each year if retroactive coverage is set to zero, said Ashton Wyrick, senior director of government and community relations advancement.
“Really, it’s inflicting $2 worth of pain, or cost, to the hospital, for the state to save a dollar,” Wyrick said. “So it’s not necessarily a clean cut.”
Sen. Machaela Cavanaugh introduced a bill that would require the state to maintain the maximum amount of retroactive coverage as determined by federal law. The bill hasn’t advanced from the Health and Human Services Committee, but Chairman Brian Hardin said negotiations are ongoing among legislators, the Governor’s Office and DHHS.
“To push it to zero, I don’t know that Nebraska is ready for that, that’s my opinion,” Hardin said.
The tightened time frames under the federal changes will create challenges, Nordquist said, but not as severely as a complete elimination of retroactive coverage, which would have “a pretty disastrous financial impact” on both providers and patients.
Providers, especially in rural areas, are operating on increasingly thin margins, said Jim Ulrich, CEO of York General. York’s long-term care facility has the benefit of being attached to a larger hospital system, but the margin has still grown so small that it’s nonexistent some months.
Getting a Medicaid application together for new residents is hard, Ulrich said, because providers often have to rely on family members to collect all the necessary documentation, like birth certificates, proof of residence and financial records.
“Just getting that process done takes time,” Ulrich said. “And when you have a resident that needs to be admitted for care, they often need to be placed while the application process is underway.”
Some families will not be able to cover the cost of care for the time between a person needing to enter a facility and finishing the Medicaid application, Ulrich said, and providers will have to write them off as charity care.
“Nursing homes are tough to make go as it is … retroactive payments are a bigger thing, but even the little things like cuts in rates or eligibility can have an impact,” Ulrich said.
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This story was originally published by Flatwater Free Press and distributed through a partnership with The Associated Press.
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