Click here to read the minimum standards for Nebraska health insurance plans.
LINCOLN — Gov. Dave Heineman rejected federal choices in favor of a “Nebraska option” Monday for a key piece of the federal health care overhaul.
The governor announced that he has selected a high-deductible health insurance package to be the minimum standard for health insurance plans in the state.
The package has a $4,000 annual deductible for individuals and $8,000 for families, if they choose health care providers in their insurer's networks.
Monday was the deadline under the 2010 federal health care law for states to decide on an “essential health benefits package” as a benchmark for insurance coverage.
Heineman complained that Nebraska was forced to make a choice without having critically needed information from the federal government. In the absence of final regulations, he said, he chose an option that focuses on affordability.
“I want a Nebraska option that makes sense for our citizens,” Heineman said. “Providing affordable health insurance options for Nebraskans allows Nebraskans, not the federal government, to choose what is best for their needs.”
But others questioned whether the proposed benchmark would serve Nebraskans well or meet federal requirements.
Jennifer Carter, with the Nebraska Appleseed Center for Law in the Public Interest, said that setting deductibles too high would put health care out of reach for many people.
Under the new law, federal subsidies will be available to help people pay premiums, she said. But the subsidies don't cover the cost of deductibles, which would continue to come out of people's pockets.
State Sen. Jeremy Nordquist of Omaha said the governor's choice suggests that “he doesn't really understand what affordability really is.”
Nordquist also said he was dismayed there had not been a chance for public discussion of the option that Heineman selected.
“What we have is more decision-making being done behind closed doors and without public accountability,” Nordquist said.
The governor's selection was not among the options discussed at a Department of Insurance public hearing in August or among the plans analyzed by the department's consultant, Mercer Government Human Services Consulting.
Heineman submitted the plan to U.S. Secretary of Health and Human Services Kathleen Sebelius in a letter Monday.
In the letter, he reserved the right to change the state's selection if federal officials altered the selection or issued new regulations, guidance or bulletins.
If approved, the governor's choice would set the floor for all health insurance plans sold in the state, starting in 2014, whether those plans are sold inside or outside of the insurance exchanges mandated under the federal law.
States that don't choose their own benchmarks will have them set by the federal government.
The decision on essential health benefits does not commit Nebraska to operating its own insurance exchange. The deadline for that decision is Nov. 16.
If Nebraska doesn't run its exchange, the job would fall to the federal government.
Exchanges, the centerpiece of the federal law, are where people can compare and buy health insurance policies. Federal subsidies for qualifying families will be available only through the exchanges.
Guidelines issued by the federal government in December said states could choose from among four types of plans for the essential health benefits benchmark. The four are the federal or state employee health plans, the state's largest health maintenance organization or the most popular small group health plan offered in the state.
Nebraska Insurance Director Bruce Ramge told state lawmakers last month that, based on the information available then, the department would recommend the most popular small group plan — the Blue Cross Blue Shield Blue Pride Option 5 — as the benchmark.
Heineman chose a fifth option, which he said would cost about 28 percent less than the Blue Cross plan but cover all the services required under the federal law.
Higher-priced plans with better benefits could be offered through the exchange for those who want them, he said.
“The federal government has been saying they want the best ideas from the states,” he said.
Benchmark plans must cover health care services in 10 key areas: outpatient services; emergency services; hospitalization; maternity and newborn care; mental health and substance-use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices, meaning care that restores or improves a person's level of functioning; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
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