After Nebraska’s state employee health insurance fund peaked at $83 million in fiscal year 2021-2022, it has since dropped to just over $7 million by fiscal year 2024-2025, according to an April 15 news release from State Auditor Mike Foley.
Between fiscal 2024 and 2025, claims paid increased by $36 million, the release said. Mr. Foley pointed to “inadequate oversight” by the Department of Administrative Services team that oversees wellness and benefits. The release alleged duplicative provider payments, coverage for ineligible individuals and “tens of millions of dollars” in pharmaceutical rebates that were not reviewed for accuracy during the time of UnitedHealthcare’s contract for claims processing.
Mr. Foley’s office sent a letter to the department outlining initial concerns but did not call for a full audit. As the employer share of premiums increased, an additional $24.8 million in premium contributions have gone to the program from July 2025 through February 2026. The letter said, “the vendor [UnitedHealthcare] charged with paying the claims is also responsible for auditing and adjudicating its own processes.” The letter also said UnitedHealthcare did not provide more detailed data upon the state’s request.
UnitedHealthcare failed to meet access standards in rural areas, as well, according to the letter’s data. For example, the urgent care access rate was around 56%, but the goal was 90%. This resulted in an $85,000 penalty.
UnitedHealthcare held the employee contract since 2012, and Blue Cross Blue Shield of Nebraska will take over in July.
“We are committed to providing high-quality, affordable health benefits to State of Nebraska employees. Healthcare in the United States is experiencing unprecedented medical costs driven by increases in care utilization, hospital costs, specialty drugs and other factors, which can impact employee healthcare costs,” an April 17 UnitedHealthcare statement shared with Becker’s said. “We have and continue to assist and cooperate fully with the Department of Administrative Services.”
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