Health benefit exchange bills discussed
The Banking, Commerce and Insurance Committee heard testimony Feb. 21 on two bills that would establish a Nebraska health benefit exchange.
The federal Affordable Care Act requires establishment of an operational state health care exchange by Jan. 1, 2014. Without a plan in place, the federal Department of Health and Human Services would be authorized to develop and operate an exchange within the state.
LB835, sponsored by Omaha Sen. Jeremy Nordquist, would create a health benefit exchange within the state Department of Insurance (DOI) under the control and supervision of an 11-member independent governing board.
Board members would be appointed from a list of potential individuals submitted to the governor and would include:
• one small business representative;
• one health insurance agent representative;
• one health insurance carrier representative;
• two health care providers; and
• three health care consumer advocates, one from each congressional district.
The board also would include nonvoting ex officio members representing DOI and the directors of Medicaid and long-term care and children and family services. The board would be required to report to the governor and the Legislature by Dec. 1, 2012 regarding the planning, establishment and operation of the exchange.
Under the bill, establishment of the exchange would be funded by federal grants. Operational funding would be provided by transitioning the current funding mechanism for the Comprehensive Health Insurance Pool (CHIP) to a newly created Nebraska Health Benefit Exchange Fund.
The board would be required to make recommendations to the Legislature on how to proceed should the federal Affordable Care Act be judicially or legislatively deemed unlawful or invalid.
According to the introducer’s statement of intent, the purpose of LB835 is to create a transparent health insurance marketplace for Nebraskans to purchase affordable, quality health care coverage regardless of employment status and to access federal tax credits, cost-sharing subsidies and Medicaid eligibility determinations.
LB838, sponsored by Sen. Rich Pahls of Boys Town, also would create a Nebraska health benefit exchange. The DOI director would be authorized to establish the exchange under the bill, which does not specify a governance structure for a state exchange.
Mary Ann Borgeson, representing the Nebraska Health Care Alliance, testified in support of both bills, saying the state needs to meet the 2014 deadline.
Failing to establish an exchange would result in an insurance marketplace designed by the federal government, Borgeson said, which would mean giving up the ability to construct a system that meets the state’s unique needs.
“We have the opportunity here in Nebraska to keep the exchange simple and cost-effective,” she said. “There is no ‘do nothing’ option.”
Amanda McKinney of the Women’s Health Center of Beatrice testified in favor of LB835, saying oversight of an exchange would not fit well into any existing state agency.
“Governing the exchange with an independent board will ensure that it works in the interest of the people and not the health insurance industry,” McKinney said.
Dave Holmquist of the American Cancer Society and the Cancer Action Network testified in favor of both bills. Nebraska should have an exchange in place, he said, rather than waiting until the U.S. Supreme Court rules on the constitutionality of the Affordable Care Act in the spring, which could necessitate a special session of the Legislature to comply with federal deadlines.
“Nebraska should be completely prepared to implement the law,” Holmquist said.
DOI director Bruce Ramge testified in opposition to both bills, saying the development of an exchange before the Supreme Court acts would be “inappropriate.” Federal law allows states the option of creating an exchange by gubernatorial executive order, he said, adding that Gov. Dave Heineman would issue such an order if the Affordable Care Act survives the pending court challenge.
“A special session would not be necessary,” Ramge said. “Gov. Heineman has been clear. He would not allow Nebraska to make a decision … by default.”
Ramge also objected to LB835’s governing board structure, which he said would be dominated by interest groups not subject to the control of any elected official.
“Not one board member [would] represent the interests of the state,” he said.
Bruce Rieker of the Nebraska Hospital Association testified in opposition to LB838, saying the oversight structure of an exchange is important. Rieker added that creating an exchange by executive order would remove the Legislature’s ability to have input in the process and diminish accountability and transparency.
Michaela Valentin of Blue Cross and Blue Shield of Nebraska testified in a neutral capacity. She said trends suggest that federal deadlines for establishing state exchanges will be extended, removing the necessity of enacting legislation this session.
The committee took no immediate action on the bill.
