| State of Nebraska to Participate in Federal Health Exchange |
“I want to share with Nebraskans that I have listened to all sides of this issue,” said Gov. Heineman. “As Governor, my focus is on implementing the federal health care law in the most efficient and cost effective manner for Nebraskans and their families.”
Whether a state runs a health exchange, or that is done by the federal government, all citizens will have the option to purchase insurance policies through an exchange. A state decision either way does not affect that access.
The Governor appreciates the input he received from a variety of perspectives throughout the course of the several years since the federal health care law was enacted in March 2010. While there were diverse and emotional opinions on this issue, the Governor stated that his decision is based on what is best for Nebraska’s hard-working, middle class taxpayers.
Fiscal analysis of budget impacts done by the Department of Insurance and the Department of Health and Human Services calculate the cost of a state insurance exchange for Fiscal Years 2013-2020 at $646 million; while the cost of a federal insurance exchange is $176 million. The cost of a state exchange to Nebraska taxpayers is $470 million more than a federal exchange.
The analysis encompasses costs associated with building, managing and maintaining a state-based exchange. These costs include, but are not limited to: website development, call center operations, an insurance premium billing system, staffing, equipment, supplies, office space, and the technology costs related to each of these functions. In addition, these costs include expenses necessary for the exchange to interface with the Medicaid program, in accordance with requirements of the federal law.
“The reality is that the federal health care law is being totally dictated and totally controlled by the federal government,” the Governor added. “On the key issues, there is no real operational difference between a federal exchange and a state exchange. A state exchange is nothing more than the state administering the Affordable Care Act with all of the important and critical decisions made by the federal government.”
The Affordable Care Act calls for the creation of health insurance exchanges, state-run or federal-run markets where households and small businesses can shop for private coverage. Governors have a Nov. 16 deadline to indicate their intent to establish a state-based exchange. If a state does not elect to run a state-based exchange, then the health exchange will be implemented by the federal government.
According to the federal law, open enrollment is scheduled to begin for health exchange plans Oct. 1, 2013. Any exchange is expected to be fully operational on Jan. 1, 2014.
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Residents of states (like Nebraska) that do not set up health insurance exchanges under Obamacare will be hit with higher premiums under rules announced by the Health and Human Services Department.
Insurance companies will be charged 3.5 percent of premiums they sell through the federal exchanges, the department announced .
Insurers will likely pass that surcharge on to clients, leaading to higher premiums.
The states to be affected are those that refuse to set up their own exchanges because of opposition to the Patient Protection and Affordable Care Act. They are almost certain to be those under Republican control. In those states, HHS will set up the exchanges
GOP governors are taking a hard line against implementing any part of the healthcare law, which will mean insurers in their states will need to pay the monthly fee, The Hill reports.
Arizona Gov. Jan Brewer announced that AZ. will not set up an exchange, because the proposal is "too expensive and too risky." That brings the total of states refusing to comply with the act's provisions to 17.
The exchanges were supposed to be up and running in all states by 2014. HHS plans to charge insurers 3.5 percent of the premiums for each plan they sell through the federal exchange.
There are still some states that haven’t yet decided whether to set up their own exchanges or use the federal exchange option, so it’s not yet known how much money the HHS will collect from insurance companies. In addition, HHS said it might change the user fees later on as more people enroll through the exchanges.
But exchanges that don’t attract enough insurers may make the companies carry larger percentages of unhealthy and thus expensive, patients, making them appeal even less to customers.
“It is important to keep in mind that any new fees to pay for the administration of exchanges will add to the cost of coverage, and that is why the focus needs to be on reducing administrative costs, streamlining operations, and avoiding regulatory duplication that will add complexity and increase costs," America's Health Insurance Plans (AHIP) said in a statement on the new rules.
The regulations also show how the government plans to redistribute money to help insurers with expensive clients stay afloat, as Obamacare provides fees to help companies offset the costs of taking on numerous unhealthy patients. The Obama administration says the process is designed to make sure one insurance company doesn’t get stuck with an unhealthy risk pool.
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