Nelson plan may be on the right track

Friday, April 16, 2004

Mention "federal" and "health insurance" in the same sentence, and for many, visions come to mind of Clinton health care plans and long waits for services common in Europe or Canada.

But that shouldn't keep a proposal by U.S. Sen. Ben Nelson from receiving fair consideration.

Wednesday, Nelson announced plans to introduce legislation to have the federal government serve as a reinsurer for health insurance companies facing coverage costs for catastrophic illnesses and injuries.

"This can be the model for a new catastrophic coverage 'backstop' for health care," Nelson said Wednesday in Omaha.

Details are still being drafted, but Nelson is considering offering a government guarantee of $250,000 per loss to health insurance companies to cover catastrophic losses. Now, when insurance companies must maintain a large pool of funds to cover clients who suffer catastrophic losses.

"With a federal catastrophic backstop, insurance companies will not have to maintain as large a pool; they will not have to factor in these catastrophic expenses," Nelson said.

Nelson, a McCook native and former director of the Nebraska Department of Insurance as well as governor, brings valuable expertise to the issue. The play could drop health insurance premiums by as much as 15 percent, he said.

"I'd like to see it drop more than that," Nelson added. His proposal would create a certification process by which insurance companies could be reimbursed for catastrophic costs.

Nelson cited Urban Institute reports which indicate 43 million people, including more than 10 million children, are without health insurance. More than 150,000 Nebraskans, or 9 percent, are without insurance, he said.

McCook insurance man Larry Eisenmenger noted that many of the 43 million either qualify for Medicaid or will qualify after their assets have been depleted, so a certain amount of government coverage does exist.

"But the way in which it is paid is humiliating to the recipient and often underpaid to the provider, the hospital or doctor," said Eisenmenger, who is on the board of directors of the Independent Insurance Agents of Nebraska.

Portability is the other current major problem with health insurance, Eisenmenger said, and Nelson aims to address this issue as well.

Portability issues concern people who lose health insurance coverage after changing jobs, or going to work for small employers that may not offer health benefits.

"Further, if they or their family members have health issues, they may not qualify for individual health insurance coverage," Eisenmenger said. "Something needs to be done, and hopefully Sen. Nelson is on the right path to a better solution."

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