AP News

Neb. governor vows to fight Medicaid expansion


LINCOLN, Neb. (AP) — Gov. Dave Heineman promised Thursday to block any effort to expand Nebraska's Medicaid program, a key provision of the federal health care overhaul that the U.S. Supreme Court deemed optional for states while upholding most of the law.

The Republican governor told reporters that expanding coverage to at least 100,000 more Nebraskans would drain money from other priorities, such as education, or require a tax increase. He said he has no plans to call a special session to more quickly comply with the requirements of the landmark law signed by President Barack Obama.

"It's clear it's now the law of the land," Heineman said. "We're going to study this. We're going to thoroughly review it in light of the changes that occurred today and then make a determination of how we're going to move forward."

Heineman said the state faced too many unknowns to enact a state-based insurance marketplace right away, including the outcome of the November presidential election and whether the federal government would grant states another deadline extension to comply with its rules. GOP presidential hopeful Mitt Romney has vowed to repeal the law if he wins, and Heineman said the ruling will energize Republican and independent voters.

Heineman denied he was intentionally delaying action, saying state officials needed time to interpret the ruling and how it would affect Nebraska. States have until Nov. 16 to tell the federal government how they plan to run an exchange program mandated in the bill, which is designed to let customers compare prices.

Lawmakers are scheduled to receive an update on the state's plan at a hearing on July 19. The state has accepted nearly $6.5 million in federal grants to plan the exchanges.

The Nebraska Department of Insurance has been developing a plan for an exchange since shortly after the law was signed in 2009. Department executives, who answer to Heineman, have complained that the federal government hasn't given them specific guidance.

Most people who enroll would likely qualify for taxpayer-financed subsidies. The exchanges must be operational by 2014.

"The key now for us in Nebraska is to work and implement this in a way that works best for us," said Omaha Sen. Jeremy Nordquist, a Democrat who has pushed for the state to enact the law's requirements. "There's a lot of state flexibility in this law, and it's up to us to do this in a way that suits Nebraskans."

Insurance industry leaders said the ruling would have little immediate effect on Nebraska, one of 26 states that challenged the health care law, but it sends a clear signal that state officials must act swiftly. Roughly 237,000 Nebraska residents — about 13 percent of the population — are uninsured, according to 2011 census data. Nationally, 49.9 million Americans — about 16 percent of the country — are not covered.

"There are massive government systems that have to be put in place and ready to go in a little over a year," said Steven S. Martin, president and CEO of Blue Cross and Blue Shield of Nebraska, the state's largest insurance company.

The Nebraska Department of Insurance has been working on a state-based exchange for Nebraska in case the law was upheld. Through his secretary, director Bruce Ramge referred all questions to the governor's office.

A report commissioned by the Nebraska Department of Health and Human Services estimated that the Medicaid expansion would require coverage for an additional 108,000 to 145,000 residents.

The federal health program administered by states covers low-income adults, children, and people with certain disabilities. The health care law required states to expand their Medicaid coverage to adults who make up to 133 percent of federal poverty levels, starting in 2014.

Before the ruling, the law had required the federal government to pay the full cost of the expansion for the first few years. States would contribute 5 percent starting in 2017 and gradually increase the amount until they were paying 10 percent of the total cost. The federal government would continue to cover 90 percent.

Nebraska Appleseed, an advocacy group for low-income families, lauded the ruling. Jennifer Carter, director of the health care access program with Nebraska Appleseed, said the group is analyzing the ruling — particularly the finding that struck down a provision intended to force states to expand Medicaid coverage.

Carter said her office has heard from plenty of people who can't afford coverage in the private market.

"If we chose to leave all those Nebraskans uninsured and not able to access health care coverage, not only is that devastating for them, it essentially serves as a tax on the rest of us who are paying health care coverage in the private market," she said.

Expanding Medicaid would reduce the number of uninsured in Nebraska, said Cory Shaw, CEO of University of Nebraska Medical Center Physicians in Omaha. But he said that the expansion would probably have to come at the cost of other valued programs — like funding education.

"We're all making tough decisions around limited dollars," Shaw said. "I'm certain nearly every hospital or physician or nursing home or home health care agency would tell you that they certainly would support having more and not fewer of their patients covered by health insurance. But none of those decisions happen in a vacuum."

Attorney General Jon Bruning, a Republican who was part of the legal challenge, said the court "found a convoluted way to rule this law constitutional." Bruning said Nebraska's participation in the case cost the state $25,000, which came out of his office's budget.

"Absolutely," he said when asked if the expense was worth it. "It would have been worth it for the states to spend many multiples of what we spent."

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Associated Press Writer Margery A. Beck contributed from Omaha, Neb.


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