Nebraska Medicaid Program

Nebraska Medicaid Reform

Program Expenditures

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Total state and federal spending for Medicaid in Nebraska in FY 2005 was approximately $1.4 billion. The aged, blind and disabled are a very small percentage of the total number of eligible people but make up the lion’s share of Medicaid expenditures.
  • Children and pregnant women make up about 64½ % of the total population in Nebraska, but expenditures for the children are under 26%.
  • Adults make up about 12% of the population with expenditures of less than 8%.
  • People over age 65 make up 9.2% of our Medicaid population, but about 26% of the expenditures.
  • Blind and disabled persons make up 14.4% of the population but over 40% of the expenditures.

Nebraska's Medicaid program from 2004 to 2005:

  • Total federal and state expenditures went up $80 million, a little over 6%.
  • State general fund tax dollars went up almost 20% (that’s an atypical year).
  • The number of people on Medicaid changed less than 1%.
  • The largest growth was for disabled individuals, which is the most expensive population we have in our Medicaid program right now.
  • The number of persons on Medicaid over the age of 65 was stable.

Largest Medicaid Expenditures:

  • Largest Medicaid expenditure - nursing facilities (about 20%). It's much less than 15 years ago, when nursing facilities made up 40% of expenditures. This reflects reform efforts in the late 1990s implemented by the Medicaid program in Nebraska that resulted in a planned changing over to assisted living and home and community services. Nebraska saved $30 million a year as a result of the assisted living program.
  • Second largest expenditure - drugs (about 17%). Nebraska received $57 million in drug rebates, leaving net expenditures below $200 million. For FY 2003 and 2004, it was at or below 10% a year because of changes made in the pharmacy program.
  • Third largest expenditure - inpatient hospital services (about 13%)
  • Fourth largest - home and community-based waiver (about 12%).

There are three separate sources of funding:

  • General funds from the Medicaid and the Children’s Health Insurance Programs (what most people think of as "Medicaid").
  • Money from other budget programs that are counted as part of Medicaid.
  • Federal share. In FY 2004, the federal share was about 65%, not the 60% that we use as a general rule of thumb. Congress passed a special federal match requirement that was in place for about 15 months while all states were in fiscal crisis. Those monies were received in part of 2003 and all of 2004. When the special match ended, the federal share dropped from 65% to 61% Nebraska in one year. The general fund jumped nearly 20% in that one year.
  • The State Legislature allowed money being spent for people’s health care as 100% state general dollars to be leveraged to receive federal match. That money's being used for the developmentally disabled and the mentally ill.

Largest spending categories, and changes over the last six years (FY 2000 - FY 2005)

  • Blind and disabled: Every year this was the largest part of the budget, increasing from 37% in 2000 to over 40% in 2005.
  • People 65 and over: Spending remained basically flat in terms of a percentage during the first three years, peaked in 2002 and slowing declined over the last three years.
  • Children: Spending rose substantially over the last few years.
  • Adults: Spending has remained basically flat.

Average costs last year:

  • Persons 65 or over - $1,663 a month.
  • Disabled persons - $1,649 a month (More persons are in this category than any other, therefore largest share of expenditures)
  • Persons who are blind - less than $1,000.
  • Adults - $367 a month
  • Children - $235 a month.

The Medicare prescription drug benefit:

  • About 53% of the program, or $112 million, was spent on people who are also eligible for Medicare. These people and spending will switch over to the Medicare program, so expenditures for drugs will be cut by over half as a result of the prescription drug benefit.
  • Nebraska has to pay the federal government what is called a claw back - a formula in which the federal government tries to calculate savings as a result of their taking over the prescription program. Over half of the prescriptions written for our Medicaid program will go away with the switch to the Medicare program in January 2006.
  • Most people receiving prescription drugs in Nebraska are not Medicaid eligible, but that minority of about 32% accounts for 53% of our expenditures.

Number of eligible people and the expenditures by age group:

  • About 14% of the Medicaid population is under the age of one.
  • The largest category -- ages 6-18 -- makes up 36% of the Medicaid population.
  • If you compare expenditures, children proportionally cost less at age 0-1 and costs raise as the age goes. Nebraska has 189 people over the age of 100 on Medicaid.

Rural / Urban:

  • In FY 2004, the rural and urban populations on Medicaid were close to a 50/50 split.
  • Almost 45% of actual expenditures went to the urban areas (the three largest counties—Lancaster, Douglas and Sarpy Counties) and 55% went to rural areas (all other counties).

Charts & Graphs  (listed in alphabetical order)

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