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LINCOLN, Neb. (AP) — After three failed attempts to expand Medicaid under the federal health care law, Nebraska lawmakers will unveil a new proposal this week that would offer private coverage to thousands of low-income residents.
The newest bill is modeled after the so-called private option adopted by Arkansas, which received a federal waiver to spend Medicaid dollars on private insurance.
The proposal is expected to face opposition from Gov. Pete Ricketts and conservative lawmakers, who argue it's not sustainable. Ricketts spoke fervently against Medicaid expansion in his State of the State address last week, calling it "an unreasonable risk to Nebraska taxpayers."
Nebraska is one of 19 primarily conservative states that have rejected efforts to expand Medicaid, the health care program for the poor and disabled. Thirty-one states and the District of Columbia have agreed to the expansion, and governors of three non-expansion states — South Dakota, Virginia and Wyoming — are now advocating it in their latest budget proposals.
The plan by Sen. John McCollister of Omaha would cover an estimated 77,000 childless adults whose incomes are too high to qualify for regular Medicaid but too low to receive tax subsidies available through the federal health care exchange.
The coverage gap exists because tax subsidies are only available to people with household incomes between 100 percent and 400 percent of the federal poverty level.
The Affordable Care Act doesn't provide the subsidies for people who make less than that because the law originally required all states to expand Medicaid, which would have covered that population and made the subsidies unnecessary. But in 2012, the U.S. Supreme Court ruled that the federal government can't punish states that don't expand Medicaid.
Under Nebraska's upcoming plan, some recipients would still have to pay up to 2 percent of their incomes for premiums to ensure they share in some of the cost. If the federal government's share of funding ever dropped below 90 percent, the program would cease in Nebraska, said McCollister, who is expected to introduce the bill this week.
McCollister, a Republican, said he didn't support the Affordable Care Act when it passed in 2010 but eventually accepted that Congress will never repeal the entire law. In addition, he said he came to agree with supporters who argued Nebraska is losing out on billions in federal matching money that could help the state's health care industry and economy.
"There's a good business case to make for transitional health insurance," he said. "When you have a healthier population, it should result in greater productivity."
McCollister pointed to a 2015 University of Nebraska at Kearney study that found economic benefits to expanding Medicaid. The study predicted the state would see at least $1 billion in economic benefits if Medicaid was expanded, in addition to $2.1 billion in federal funding over five years.
The expected benefits included the elimination of so-called "silent taxes" paid through higher premiums to cover the cost of the uninsured, a reduction in medical related bankruptcies, and increased consumer spending because fewer patients would face financial hardship. The research was commissioned by the Nebraska Hospital Association and AARP Nebraska, which have lobbied for Medicaid expansion.
Sen. Heath Mello of Omaha said the measure, which he helped craft, represents a different approach than previous Medicaid expansion bills because of its focus on private insurers.
Mello, the chairman of the budget-writing Appropriations Committee, said the measure would eliminate some of Nebraska's health care expenses by covering people who receive treatment through state programs.
Mello said some of the potential benefits aren't easily measured, such as new jobs created in the health care and insurance industries by helping more uninsured residents obtain coverage.
Without expanded Medicaid coverage, many Nebraska hospitals will have to absorb the costs of treating uninsured patients, said Elisabeth Hurst, a lobbyist for the Nebraska Hospital Association. Hurst said advocates are hopeful that recent support in conservative states will help build momentum in Nebraska.
"I think that speaks to the fact that this shouldn't be an ideological conversation," Hurst said. "It should really be about taking care of the citizens of this state."
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