LB382 creates the Medicaid Managed Care Excess Profit Fund and directs that money returned to the state treasury from Medicaid managed care excess profits be deposited into that fund. The fund is to be used first to cover any losses under the related Medicaid managed care provision, and then for specified aging and health-related services, including services that address the health needs of adults and children under the Medical Assistance Act. The bill lists a broad set of eligible uses, such as filling service gaps, system improvements, evidence-based early intervention and home visitation programs, medical respite services, translation and interpretation services, continuous glucose monitor coverage, services that sustain access to care, Nebraska Prenatal Plus services, intergenerational care facility incentive grants, and reimbursement for the actual cost of eligible activities and services as determined by the Legislature.
The bill also states legislative intent to appropriate $2 million in fiscal year 2025-26 and $2 million in fiscal year 2026-27 from the new fund to the state’s area agencies on aging for additional eligible activities and services, with equal distribution among Nebraska’s eight area agencies on aging. It amends existing law to require the Department of Health and Human Services to reimburse each designated area agency on aging for 75% of the actual cost of eligible activities and services, using a mix of state, federal, and other available funds. If available funding is insufficient, reimbursements are reduced proportionally, and costs above an approved budget are not reimbursable.
In practical terms, LB382 changes state law governing how excess profits from Medicaid managed care are handled and expands the financing structure for aging services. It creates a dedicated funding stream, sets investment and accounting rules for the fund, and repeals the prior sections it replaces. The bill affects the Department of Health and Human Services, the state treasurer, area agencies on aging, and providers or programs that serve older adults, children, and other Medicaid-related populations.
The overall sentiment around the bill appears strongly favorable. It advanced with broad support, was amended and passed on final reading by a wide margin, and was ultimately approved by the Governor. The voting history suggests the Legislature generally supported redirecting excess managed care profits toward aging and health services, with little recorded opposition at final passage.
The main point of contention appears to have been how the money should be allocated and what conditions should apply to spending. The bill’s reimbursement structure, proportional reductions when funds are insufficient, and the specific list of eligible services indicate an effort to balance flexibility with fiscal control. Any debate likely centered on appropriations, the scope of allowable uses, and whether the fund should prioritize area agencies on aging versus other health-related programs.
LB382 amends Nebraska statutes to establish the Medicaid Managed Care Excess Profit Fund and to direct excess managed care profits into a dedicated state fund for specified aging and health-related purposes. It changes the reimbursement framework for designated area agencies on aging by requiring DHHS to reimburse 75% of actual costs for eligible activities and services, subject to available state, federal, and other funds. The bill also repeals prior sections it replaces and sets legislative intent for future appropriations from the new fund.
The bill appears to have been received positively overall. It moved through the Legislature with strong final passage support and was signed by the Governor, indicating broad agreement with the policy of using Medicaid managed care excess profits to support aging services and related health programs. The recorded votes suggest limited opposition at the end of the process.
The most likely areas of contention were fiscal and programmatic: how much money should be appropriated, which services should qualify for funding, and whether area agencies on aging should receive a fixed reimbursement rate or be subject to proportional reductions if funds are short. The bill’s detailed list of eligible uses and its cap on reimbursable costs above approved budgets suggest lawmakers were trying to prevent open-ended spending while still expanding support for aging-related services.