Nearly 237,000 Nebraskans do not have health insurance, close to 13 percent of the population. The Affordable Care Act passed Congress in March 2010 to help address this issue through health-insurance exchanges, pooling risk and offering subsidies, or for those eligible, an expansion of Medicaid reimbursed by the federal government.

Nebraska has applied for and accepted almost $6.5 million in federal money to be used in implementing a health-insurance exchange. State officials have refused to comment on how that money is being spent beyond the hiring of two consultants, formerly political operatives, and a plan to conduct seven informal public hearings starting Aug. 27 in Gering and eventually coming to Omaha on Sep. 10.

State-based health insurance exchanges “are new organizations that will be set up to create a more organized and competitive market for buying health insurance,” said Jordan Delmundo, policy and program director with the Nebraska AIDS Project. “Beginning in 2014, Exchanges will serve primarily individuals buying insurance on their own and small businesses with up to 100 employees, though states can choose to include larger employers in the future.”

States refusing to set-up an exchange will be forced to accept an exchange set-up by the federal government.

The ACA would impose fines on those individuals who did not have health insurance by 2014, however, the law creates subsidies to insure everyone can afford coverage, no matter their income.

“An important piece of the exchanges is subsidy/premium tax credit available for individuals earning incomes between 133 and 400 percent of the Federal Poverty Level ($15,000 to $48,000),” said Delmundo. “The feds will help those lower income individuals by subsidizing their insurance purchase.” A sliding scale based on family size and income, the maximum out of pocket premium payments will be allocated from the Poverty line. See the chart taken from a 2010 analysis by the Congressional Research Service.

Nebraska has already received two grants to build its exchange — a $1 million planning grant in September 2010 and $5.48 million “Level One Establishment” grant in November 2011.

The law allows for an expansion of Medicaid for those who cannot afford the subsidies, though the Supreme Court ruling allowed states to opt out of that provision.

We cannot afford to opt out of the Medicaid expansion,” said Delmundo. “A study by the Urban Institute estimated the cost for Nebraska between 2014 and 2020 to be $106 million. That may look like a lot, but it will have a huge match rate since Medicaid is a joint federal/state run program.

“States receive 100 percent funding from the federal government from 2014 to 2016. The federal share gradually drops to 90 percent in 2020 where it remains. Even after 2020 states only will be responsible for 10 cents of every $1 spent on the expansion population. So, if it costs Nebraska $106 million, we bring in $2.3 to $2.7 billion from the feds? That’s like if I agreed to trade you $27 for those 4 quarters in your pocket. It’s a more than 20 times return.”

Without action from the governor, state senators have been pushing for action.

“I was at that bipartisan health policy meeting in Lincoln sponsored by Senators Campbell, Gloor, and Nordquist where the Governor prevented his Medicaid Director from attending. She was on the agenda for a few weeks before the meeting,” said Delmundo. “I would think having the Medicaid Director there to educate us on the Governor’s views would have been helpful – more helpful than having to read about his thoughts in the paper.”

Heineman has also come under scrutiny for the 2011 hiring of John Paul Sabby and Michael Sciullo, policy analysts with the Nebraska Department of Insurance. With former ties to the right-wing Young Americans for Liberty group, Sciullo and Sabby have been involved with anti-government movements, making many people question how they will implement a federal program they oppose.

Nebraska Department of Insurance Director Bruce Ramge offered this reassurance. “John Paul Sabby and Michael Sciullo are employees of the Nebraska Department of Insurance. As such, they have done tremendous work in putting the State of Nebraska into a position to be able to implement a state-based health insurance exchange if that determination is ultimately made by state officials. Without their work, I am very confident that this would not be possible.”

This election year will no doubt be charged with fiery rhetoric on the ACA. For Nebraskans, this slow move towards an exchange is hopefully not too late. “The question is do we want to continue to pay $888 billion every year through our insurance premiums for inadequate and late care through hospitals, or do we spend $106 million over 5 years for healthier, working poor Nebraskans that can now contribute to the economy, work their way out of poverty, and inject $2 billion dollars into our local economy?” said Delmundo. “You can’t outsource health care.”

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