Nebraska Medicaid veto override fails on final legislative day

LINCOLN, Neb. — Lawmakers failed to override Gov. Jim Pillen's veto of legislation that would have clarified managed care organizations' ability to cover out-of-pocket Medicaid expenses during the final day of the 2026 legislative session April 17.

LB 929, introduced by Omaha Sen. John Fredrickson, would have allowed Medicaid managed care organizations to cover deductibles, co-insurance, copayments and similar cost-sharing charges on behalf of Medicaid enrollees to the extent permitted under federal law. Lawmakers passed the bill 31-18 on April 10, but the override motion failed 22-26, short of the 30 votes needed in the 49-member chamber.

The bill was originally introduced to broadly limit out-of-pocket costs for Medicaid recipients, including caps on copays and restrictions on additional cost-sharing charges, but lawmakers removed most of those provisions during first-round debate. Fredrickson said managed care organizations in Nebraska began covering these charges in 2024 to ensure costs would not be a barrier to care, with charges often as low as $5.

Pillen criticized the bill as "do-nothing legislation," arguing in his veto letter that it "invites overuse of our health system" and sends a message that public benefits are "handouts" rather than "hand-ups." Fredrickson countered that the measure was intended as a "proactive step" to give managed care organizations flexibility and ensure Medicaid recipients have access to vital health care.

The sustained veto was one of four bills that Pillen successfully defended on the final legislative day, despite most having passed with majorities exceeding the override threshold.