Nebraska seeks to end retroactive Medicaid coverage. Hospitals say it
will have ‘disastrous’ impact.
[March 24, 2026]
By DESTINY HERBERS/Flatwater Free Press
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.
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|
 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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