The Nebraska Legislature passed a bill Friday that will require Nebraska to pay the maximum amount of coverage for which Medicaid recipients are retroactively eligible.

Retroactive Medicaid eligibility covers some costs for Medicaid recipients from before the date they applied. For example, a Medicaid recipient who went to the hospital in March and applied for Medicaid in April could receive coverage for their March health care expenses.

Nebraska currently covers bills from up to 90 days before the application was submitted, though the One Big Beautiful Bill Act will limit coverage starting in 2027.

The OBBBA limits retroactive coverage for a three-year period, but the Nebraska Department of Health and Human Services announced in February it would seek a federal waiver to fully eliminate retroactive coverage and extend the expiration deadline to five years. The passage of this bill halts that effort.

Federal law now allows two months for traditional Medicaid enrollees and one month for Medicaid expansion enrollees from 2027-2029. That window is the maximum amount of time expenses can be covered in Nebraska under LB958.

LB958 also requires more transparency in disability assessments and limits changes to home- and community-based services without legislative approval. The bill was introduced by Sen. Machaela Cavanaugh, and the amendment to keep retroactive Medicaid eligibility was added to the bill later.

Opponents of the bill said eliminating retroactive coverage would save the state money amid a budget crisis. Proponents disagreed, saying costs would simply be shifted to hospitals.

The Nebraska Hospital Association celebrated the bill’s passage.

"By rejecting the elimination of this coverage, the Legislature has ensured that a sudden emergency doesn't lead to financial ruin for our most vulnerable neighbors," NHA President Jeremy Nordquist said in a press release. "This is a win for fiscal responsibility and, more importantly, for the health of our communities.”

Other changes are coming to Medicaid in Nebraska. The state is set to implement Medicaid work requirements for certain populations by May 1.

Learn more at Nebraska Public Media.