July 25, 2014

Concerns about health insurance exchange expressed during hearing (AUDIO)

Gov. Dave Heineman presides over Health Insurance Exchange public hearing in Lincoln

Concerns about how best to establish a Health Insurance Exchange in Nebraska have been expressed during a public hearing featuring representatives of the insurance industry.

Gov. Dave Heineman presided over two public hearings held at the downtown Holiday Inn in Lincoln. The first heard from various special interest groups and then to professionals in the health care industry. The second featured testimony from those in the insurance industry.

United Health Care CEO William Tracy estimated the cost of creating an exchange under provisions of the federal health care law would cost Nebraska at least $40 million. He urges state officials to find a broad-based method to fund it.

“The participants can’t bear the full burden. The insurers, potentially, cannot bear the full burden. I’m sure your General Revenue is stretched to the point where you don’t have an extra $40 million sitting around for a healthcare exchange development. And, so, everybody is going to have to bear some burden as far as cost if that’s the direction you decide to go,” Tracy testified.

Federal law calls for states to establish exchanges by October of next year. The health care law goes into full effect on January first of 2014.

Coventry Health Care CEO Mike Nelson stated no one knows how consumers will react to the health insurance exchange.

“Will private citizens without employer health insurance enroll into these plans or will they go without and risk paying a relatively minimal penalty?” Nelson asked. “By our estimates, even after accounting for federal premium subsidies, the typical uninsured individual or family in Nebraska will be required to pay premiums that could be anywhere from five to ten times greater than the penalty. So, it’s hard to know what the dynamics from the consumer will be.”

Throughout the hearing, discussion centered on uncertainty. The federal healthcare law approved by Congress left much of the rule-making up to various federal departments, primarily the federal Health and Human Services Department. HHS hasn’t issued many of the key rules which will guide implementation of the law, including creation of the state insurance exchanges. Many openly expressed doubts that the federal government will be ready by the deadlines established in law.

Blue Cross-Blue Shield CEO Steve Martin said indications are that the federal government hasn’t provided all the guidance needed for states to meet the October 2013 deadline.

“So, the reality that they may not be ready at all by November or by next October is fairly probable in its own right,” Martin said. “But, the idea that at least protecting the state so that we know whatever might get implemented, elements might get implemented, some components might get implemented, that we’re prepared to respond and protect the consumers of this state.”

All the health insurance executives supported creation of a state-based exchange or at least a partnership between the federal government and Nebraska, in order for the state to retain as much power as possible over the operation of the exchange.

AUDIO: Opening statements of insurance executives during public hearing in Lincoln. [31 min.]