Medicaid’s Midlife Crisis

How can we improve Medicaid health outcomes and strengthen Nebraska's health care safety net? Join us at the 2015 Medicaid Reform Summit to learn more!

Last week, the Medicaid program celebrated its 50th birthday. Medicaid is the country’s largest public health insurance provider and an important health care safety net for Nebraska’s most vulnerable citizens. However, even its most ardent supporters cannot dispute the program looks far different in 2015 than it did on July 30, 1965.

Title 19 of the Social Security Act, otherwise known as Medicaid, began as a federal-state partnership program in which voluntarily participating states received grants for eligible residents to access a defined set of medical and long-term care benefits.[1] Eligible residents included low-income children, caretaker relatives, the elderly, the blind, and individuals with disabilities.

Medicaid’s eligibility pool has greatly increased over the past fifty years. At the program’s inception, Medicaid covered 4 million people. Today, that number has expanded to include nearly 75 million beneficiaries for both Medicaid and Medicare, accounting for nearly $500 billion in annual spending.[2] Approximately 233,000 Nebraskans are enrolled in the program at an annual cost of about $1.8 billion, or 37 percent of the state’s total budget.[3] Annual state Medicaid spending in Nebraska has nearly doubled over the last decade, growing at a rate much faster than state revenues. Even without Medicaid Expansion, Nebraska is projected to spend $34.4 billion on Medicaid during the next decade, compared with $10.9 billion over the last ten years.[4]

As Medicaid celebrates its permanence in the U.S. health care system, the program is clearly entering a mid-life crisis. Medicaid spending has never been higher and too many patients still experience poor health outcomes and limited access to care. Two-thirds of Nebraska counties face shortages of primary care providers and all but two counties have shortages of mental health providers.[5] 1,400 people with intellectual or developmental disabilities are on Nebraska’s waiting list to receive Medicaid services.[6] According to a 2011 performance audit, Nebraska’s Department of Health and Human Services is “one grand mess in need of radical surgery.”[7]

Creating a new entitlement for able-bodied adults under the Affordable Care Act’s Medicaid expansion will not only hurt the most vulnerable, but undermine Nebraska’s long term reform efforts. Managed care reforms have strengthened the program by emphasizing preventative services like shots and screenings and creating a financial incentive to better manage costs. However, other patient-centered reforms are needed to place Nebraska’s safety net on a more sustainable path.

On Thursday, August 20, 2015, the Platte Institute will deliver key findings from our latest health policy study at the 2015 Medicaid Reform Summit: “Heal Nebraska with Free Market Policies.” The study is authored by public health policy analyst James C. Capretta of the American Enterprise Institute. The study will describe how the following reforms could strengthen Nebraska’s Medicaid program:

  • Pursue fixed federal funding in return for greater flexibility to manage and run the program according to the needs and preferences of Nebraskans.
  • Integrate Medicaid into a more fully functioning marketplace for insurance and health care services.
  • Provide more budgetary certainty and greater consumer control for disabled and elderly long-term care.

We hope you will join us in discussing these findings and other actionable policy solutions at the Platte Institute’s 2015 Medicaid Reform Summit.


For a complete agenda and other event information,

visit the Medicaid Reform Summit event page here.



[1] “Medicaid Timeline,” Kaiser Family Foundation, 2015.

[2] “The Effect of Medicaid HMOs on Spending and Health Outcomes.” National Bureau of Economic Research, Aug. 5, 2015.

[3] “Nebraska Medicaid Reform Annual Report.” Department of Health & Human Services, Dec. 1, 2014.

[4] Holahan, John, et al. “Cost and coverage implications of the ACA Medicaid expansion: National and state-by-state analysis.” Kaiser Family Foundation, 2012.

[5] “State Designated Shortage Areas – Medical and Mental Health,” Nebraska Rural Health Advisory Commission, U.S. Department of Health and Human Services, Revised Dec. 1, 2014.

[6] “Waiting lists for Medicaid section 1915(c) home and community-based services waivers.” Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, 2013.

[7] Stoddard, Martha. “State Medicaid director apologizes after HHS audit finds ‘one grand mess.’” Omaha World Herald. May 29, 2013.

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