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The Associated Press April 29, 2010, 9:54AM ET

Nevada opts out of high-risk insurance pool

Nevada will opt out of operating a high-risk pool for uninsurable residents and instead delegate that task to the federal government, Gov. Jim Gibbons said Wednesday.

In a letter to U.S. Health and Human Services Secretary Kathleen Sebelius, Gibbons said the estimated $61 million Nevada would receive to implement the pool under the recently signed federal health reform bill would be "grossly inadequate" to serve as many as 100,000 people who may be eligible.

Gibbons assembled a group of administrators, led by Nevada Health and Human Services Director Mike Willden, to evaluate Nevada's options under the health reform act signed in March by President Barack Obama.

The law allows states to establish their own high-risk pool, join with other states, or defer the implementation and oversight to the federal government.

The temporary program is designed to provide coverage for people who otherwise cannot get insurance because of pre-existing medical conditions until 2014, when denial of coverage for medical reasons will be against the law.

"We estimate Nevada's share of the $5 billion national pool will only allow approximately 2,900 individuals to be served," Gibbons wrote, adding that more than 500,000 Nevadans are uninsured and an estimated 100,000 may be eligible to join the pool.

"We do not believe financial or human resources are available to manage the pool," the governor wrote. "There will be a significant problem managing the few who become eligible, but an even larger problem managing the frustration of people not eligible for the pool."

He asked Sebelius to keep him apprised of the federal government's progress in implementing the high risk pool in Nevada.

Earlier this month, the Republican governor signed an executive order appointing a Las Vegas attorney to represent Nevada in a multistate lawsuit filed in Florida challenging the constitutionality of the law after Democratic Attorney General Catherine Cortez Masto refused.

Gibbons argues the law is unconstitutional because it requires people to buy insurance from a private vendor or face penalties enforced by the Internal Revenue Service. He also said the law will cost Nevada $575 million in added Medicaid costs.

Gibbons on Wednesday criticized U.S. Sen. Harry Reid, D-Nev., who helped push the bill through Congress.

"Harry Reid's idea of reform might be breaking the backs and bank accounts of hard working Nevadans, but it is not mine," he said.

Reid issued a statement late Wednesday criticizing Gibbons' rejection of the federal money.

"Jim Gibbons is once again proving whose side he is on, and it's not on the side of struggling Nevadans," Reid spokesman Jon Summers said. "He is turning down $61 million that Sen. Reid helped secure for our state to help people who can't get insurance because of pre-existing conditions."

Summers said there are other "fallback" provisions in the law that will allow people with pre-existing conditions to obtain coverage.

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