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For Immediate Release
August 14, 2017

CONTACT
Julie Naughton, Public Information Officer, Communications and Legislative Services, (office) 402-471-1695 or (cell) 402-405-7202, julie.naughton@nebraska.gov

MLTC HIPP SPA Approval From CMS

LINCOLN— The Nebraska Department of Health and Human Services (DHHS) has received approval of a State Plan Amendment (SPA) to continue operations of its Health Insurance Premium Payment (HIPP) program from the federal Centers for Medicare and Medicaid Services (CMS). 

The amendment, submitted Apr. 25 and approved in late July, makes revisions to the cost-effectiveness test for individuals enrolled in HIPP.  The new methodology was necessary for the program to adapt to a changing private health insurance market, increased diversity in the administration of Medicaid services, and the increased ability of the Medicaid program to collect and analyze payment data. There are approximately 230 Nebraskans currently in the program.

The HIPP program was created in 1994 to contain costs to the Medicaid program. Many HIPP participants are higher-need individuals. The HIPP program pays the private health insurance premiums of individuals who are eligible for and enrolled in Medicaid when Medicaid determines it is cost-effective for the Medicaid program to pay those premiums. If HIPP is not cost-effective, the individual’s eligibility to receive Medicaid coverage is not affected. This initiative furthers Nebraska Governor Pete Ricketts’ priorities of making state government more efficient, more effective, and more customer-focused. 

“This change to the HIPP program continues a fiscally responsible and pragmatic approach to providing needed benefits,” said Thomas “Rocky” Thompson, interim director of the Division of Medicaid and Long-Term Care.  

Medicaid, a state-federal program that provides health coverage for low-income Nebraska children, parents, elderly and disabled people, is the payer of last resort. This means that any other insurance pays for covered benefits for a Medicaid-eligible individual before Medicaid is obligated to pay. This leads to a cost savings for the Medicaid program. 

Where the other insurer does not cover a service that is covered by Medicaid, Medicaid continues to provide the coverage. If the cost of covering a participant’s premium is less than the costs Medicaid would have paid in the absence of other insurance coverage, Medicaid’s payment of the premium is cost-effective for the Medicaid program. If the premium is more than the actual or estimated medical costs to Medicaid, then participation in the HIPP program is not cost-effective for the Medicaid program.

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