Committee weighs Medicaid demonstration to cover supportive housing services under Housing First model

The Health and Human Services Committee heard LB740, a bill directing the Department of Health and Human Services to pursue federal approval to cover supportive housing services under Medicaid and to create a housing-first supportive-services fund to cover non‑federal‑matchable housing supports.

Sponsor testimony framed the plan as a public-health intervention: stable housing reduces emergency-room use, incarceration and other costly crisis services. Proponents including community nonprofits and housing advocates cited evidence from national demonstrations and randomized trials that Housing First yields higher housing retention and net public-cost savings in many contexts; witnesses referenced studies claiming returns such as $1 invested producing $1.44 in public-cost savings and larger figures from randomized trials cited during testimony.

DHHS testified neutral and supportive of the bill’s intent but cautioned that preliminary projections suggest material risk of failing federal budget‑neutrality tests for an 1115 waiver and flagged complex rules around use and commingling of federal and non‑federal funds. The department recommended later effective dates and delayed reporting deadlines to allow the agency time to operationalize a compliant program.

Proponents urged the committee to allow Nebraska to leverage federal Medicaid authority to address homelessness as a social determinant of health; DHHS and other neutral witnesses asked for statutory clarification on fund uses, implementation timeline, and risk mitigation to ensure federal compliance.

No committee action was taken; the hearing closed after substantive questioning and multiple stakeholder testimonies.