- Associated Press - Tuesday, March 18, 2014

LINCOLN, Neb. (AP) - A proposal to extend health care coverage to low-income residents was hailed by supporters Tuesday as a smart investment in Nebraska’s economy and residents, but it was panned by opponents as a long-term financial burden.

Lawmakers debated the “Wellness in Nebraska Act,” though a vote won’t be taken until Wednesday. The legislation lays out a plan to help cover health care costs for about 54,000 residents by mid-2015 through a combination of Medicaid and subsidized private health insurance. It would cost an estimated $62 million between July of this year and June 2020.

Supporters argued that a failure to pass the plan would hurt rural hospitals, lead more residents to postpone treatment and deprive Nebraska of $2.2 billion in tax dollars paid to the federal government. Opponents said it would divert state money away from other priorities, such as education.

Many residents who would qualify have fallen into the so-called coverage gap, because their incomes are too high to qualify for Medicaid but too low to qualify for private subsidies under the online insurance marketplace set up under President Barack Obama’s health care law.

“Uninsured Nebraskans are more likely to seek care when their disease is more advanced and less treatable,” the bill’s lead sponsor, Sen. Kathy Campbell of Lincoln, told his colleagues during Tuesday’s debate. “Uninsured Nebraskans are six times more likely to go without health care, due to the cost. Even those uninsured with cancer are five times more likely - five times more likely - to delay care than those who have insurance.”

Sen. Jeremy Nordquist said the projected expenses will amount to less than a quarter of 1 percent of Nebraska’s general-fund spending between now and 2020. Nebraska is expected to spend $27 billion from its general fund in that timeframe. The state will also have forgone the benefits of $2.2 billion in taxes that Nebraskans will pay to the federal government through 2020, he said.

“The only way for us to bring those dollars back into our economy is to move forward with one of these options,” he said. “And the option before us is very much a private-sector approach.”

But the bill faces oppositions from a group of conservative senators and Gov. Dave Heineman. In his weekly newspaper column, the Republican governor argued that state Medicaid expenses would rapidly grow under the bill and pull money away from other priorities, such as education.

“I’ll take no plan over a bad plan any day,” said Sen. Bill Kintner of Papillion. He added that Medicaid costs have historically risen higher than inflation, and “it gobbles up more and more of every state’s budget.”

Nordquist said the plan would create a short-term savings of $5.5 million by lifting the burden of several state-funded care programs, and would reduce the long-term costs of uncompensated care.

Other senators said they were concerned that the bill would pull Medicaid away from its original intent. Sen. Colby Coash of Lincoln said he didn’t want to jeopardize Medicaid coverage for vulnerable Nebraska residents, including people with disabilities, for whom the program was designed.

“I’m concerned that what we have in (the bill) prioritizes coverage for those who can work over the needs of people with disabilities,” he said.

The new bill would offer traditional Medicaid coverage to residents who make less than 100 percent of the federal poverty level, which is $19,530 for a family of three. Participants who make between 50 percent and 100 percent would have to pay as much as 2 percent of their income for premiums, which could be waived if they participate in a wellness program that would initially include a medical checkup and health assessment.

Residents who make between 100 and 133 percent of the federal poverty level would still qualify for subsidies offered under the federal health care law, but the proposal would have Medicaid dollars cover most of what they’re now paying in premiums and copays. Those participants would have to pay up to 2 percent of their incomes.

Residents with employer-sponsored health insurance would be allowed to keep their plans, but Medicaid would cover a worker’s contribution if that employee makes up to 133 percent of the federal poverty limit. Campbell said the provision was added to address some senators’ concerns that the expansion might pull business away from the private market.

The federal government would pay 100 percent of the cost until 2016, then gradually decrease its contribution to 90 percent by 2020.

Campbell said the legislation includes a requirement that lawmakers re-evaluate the program if federal reimbursement ever drops below 90 percent.

Sen. Russ Karpisek of Wilber said he believed the bill would benefit Nebraskans in low-wage jobs, many of whom are in small towns. Karpisek said he supports work requirements within Medicaid, and he believes that some people exploit the system. But he argued that the bill would deliver the greatest benefits to working-class people.

“This is a very good idea, to help those people who are trying,” he said.

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Associated Press writer Christine Scalora contributed to this report from Lincoln.

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