Nebraska Insurance Director Needs More Data on Exchange Cost

By | October 17, 2011

Nebraska insurance officials can’t decide whether to recommend a state-based health insurance exchange or follow a proposed federal model until they know how much the national plan will cost, Nebraska Department of Insurance Director Bruce Ramge said.

The department is also heeding Gov. Dave Heineman’s preference to wait until the U.S. Supreme Court rules on the constitutionality of a new national health care law under which the federal plan would be offered, Ramge said.

“We don’t know exactly yet what a federal exchange would look like, what cost would be associated with it,” he told the Associated Press. “It would be nice to be able to compare. There are a few really important federal regulations that haven’t yet been hammered out.”

Officials do not yet know the minimum essential benefits to be offered in a federal plan, which would shape its cost.

“We feel it’s too soon to make a recommendation as to how the state should go forward,” he said.

State officials can choose to adopt a state, regional or federal exchange, or a federal-state partnership under which the federal government runs certain aspects, such as electronic record-keeping, while the state handles customer service or other tasks.

At least one lawmaker who has studied the insurance exchange program says the Legislature should move before the court rules.

Omaha Sen. Jeremy Nordquist, who chairs of the National Conference of State Legislature’s Health Committee, said waiting for the court ruling could force lawmakers to scramble to meet a federal deadline.

The court could decide the case as late as June 2012, but lawmakers are expected to adjourn in April. Nordquist said if the law is upheld then lawmakers would have to pass a bill in a special session before June 29 — the deadline to apply for a federal establishment grant worth tens of millions of dollars.

“We lose nothing by moving forward and enacting legislation,” Nordquist said. “If we sit on our hands and the court upholds the law, we’re going to be way behind the game, potentially to the point where the federal government says, ‘Nebraska, you’re not ready. We’re going to run the exchange for you.”‘

Federal officials will create an exchange for states that don’t enact one of their own, Ramge said. Creating a state exchange would require legislation.

The state applied for a second federal grant of about $5.5 million in September to help study and design possible plans without committing to one, he said. The state received a $1 million grant last year to help plan for the change.

Nebraska is also waiting for a U.S. Supreme Court ruling to determine whether the federal health care law is constitutional. Republican Gov. Dave Heineman has said he would prefer to wait before the state commits to a plan. A ruling is expected by June 2012, in the heat of the presidential race.

The health care law, one of President Barack Obama’s major domestic accomplishments, seeks to extend health insurance to more than 30 million Americans without coverage.

The state exchanges are meant to offer a one-stop-shop for Americans to buy health insurance. They must be federally certified by January 2013, operational by 2014 and self-sustaining by 2015.

The exchanges will include income-based tax credits to help pay for premiums.

State officials have said a regional exchange appears unlikely, because each state has different regulations and needs.

A state-commissioned study released last August determined the new federal law will increase Nebraska’s Medican costs by $526 million to $766 million over the next decade. In May, a state-by-state report commissioned by the Kaiser Commission on Medicaid and the Uninsured estimated a much lower cost of between $106 million and $155 million.

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