A bill that would eliminate public benefits for most legal immigrants who have been in the country fewer than five years got a public hearing Thursday.

LB465, introduced by Sen. Kathy Campbell on Gov. Dave Heineman's behalf, was among three bills heard by the Health and Human Services Committee. The bills are part of the governor's effort to lower state spending.

Federal law has prohibited legal immigrants from getting public aid those first five years, but allowed states to decide if they wanted to provide it and pay for it themselves. Nebraska offers food stamps, Medicaid and other assistance to newer immigrants. Under the bill, that help would be withdrawn, saving the state about $3.9 million a year.

It would affect about 2,000 people a year.

The federal policy was put into place to discourage people from immigrating to the United States so they could get public assistance, state Medicaid Director Vivianne Chaumont said. The bill would exclude certain immigrants, including refugees and those seeking political asylum.

It's a proposal not made lightly, said Todd Reckling, who oversees economic and family support for the Department of Health and Human Services. But in reviewing the program, the governor determined it didn't have as high a priority as some other human services programs, he said.

James Goddard, staff attorney with Nebraska Appleseed, opposed the bill, saying that without access to programs, some immigrants are likely to struggle to meet the standards of self sufficiency.

Another bill (LB467), also a part of the governor's budget proposal, would end Medicaid coverage as a sanction to a person who fails to comply with the state's Employment First contract for welfare benefits.

The purpose of the contract is to encourage welfare recipients to get jobs and become self sufficient. The department can already make a family ineligible for cash assistance if one or both adults don't participate in the self-sufficiency contract.

A 2010 Nebraska Supreme Court ruling said that without a specific state law addressing the issue, HHS could not remove Medicaid coverage as a sanction for noncompliance.

LB467 would authorize the sanction, saving about $1.6 million a year in state general funds.

The Medicaid benefits could not be removed or denied for a pregnant woman or for 60 days after her baby is born, as long as she cooperates in providing information about the baby's father or someone else who may be liable to pay for care and services. Exceptions could be made if, for example, the woman is a victim of domestic violence.

Aubrey Mancuso with Voices for Children in Nebraska opposed the bill, saying children of parents who don't have health insurance are more likely to be uninsured, too, even though they may qualify for insurance programs.

She said parents who are physically or mentally ill can affect the welfare of their children.

Mancuso said the bill would shift costs, rather than save money, when people cut off from Medicaid begin showing up in hospital emergency rooms.

A third bill (LB468) would require or increase co-payments for Medicaid recipients. The co-pay for brand-name drugs would be $3, medical equipment over $50 would be $3, inpatient hospital admission, $15, and mental health and substance abuse office visits, $2.

Mary Angus of ADAPT Nebraska, testifying against the bill, said she was most concerned that it allows an eight-month window for the department to discontinue reporting Medicaid changes as prescribed by law.

Chaumont said that allowance in the bill was to provide the department with the ability to make sure it complied with state law as it put the budget together.

"There will be plenty of opportunities for public and legislative input in discussing the budget," she said.

It would not be used to add any Medicaid changes about which people would not be informed, she said.

Reach JoAnne Young at 402-473-7228 or jyoung@journalstar.com.

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