OCI has decided to pull our support for a state based exchange. Initially, we felt it was best for Nebraskans to design and run their own exchange rather than relying on the Federal Government to run one. Now after the decision by the Supreme Court to prevent the Federal Government from extorting dollars from the states, we feel that leaving the Federal Government to design, build, fund, and somehow make the exchange self sufficient in one year would be best for all concerned. The cost to Nebraskans if a state based exchange is implemented will be extremely high. The expansion of Medicaid would bankrupt our state. We in Nebraska have always been bound by a constitutional amendment that we can’t spend what we don’t have. By forcing the federal government to run the exchanges, we alleviate the costs, headaches and problems that will develop because of exchanges and the fact that they will not have the funding necessary for sustainability. In a previous blog titled “Want to talk about a game changer” (December 2, 2011), I discussed the mistake in PPACA that prevented a Federally Established Exchange from funding for subsidies. The wording is very explicit that the exchange MUST be established by the state. If the state refuses to develop an exchange, then the federal government will establish an exchange for those individuals in that state. Without these subsidies, no one will use the exchange to purchase coverage as there would be absolutely no advantage. The federal government, in my opinion would need to utilize the brokerage community to steer prospects into the exchange. This, to OCI, makes the most sense for agents and brokers.
There are those who would argue that giving up control is taking a risk. I don’t disagree but now is not the time to spend large sums of money on building exchanges only to have them dismantled depending on the outcome of November’s elections. Our Governor has done a great job of looking at the big picture and making decisions that are best for all Nebraskans. Putting ourselves in a precarious position by initiating an exchange does not make fiscal sense and I applaud his efforts to see the big picture. There are those in the legislature with ulterior motives that want to move quickly in building an exchange and they have been able to convince some that time is of the essence. We in Nebraska have never been ones who react but rather we reason, discuss, and decide based on facts. The facts show that building our own exchange is detrimental to the budget and harmful to our citizens.
I would ask each and every one of you to reconsider exactly what the benefit is to our state in building an exchange. If the answer is one of selfishness, then shame on you. Our business will survive no matter who builds the exchange. On the other hand, if you are truly looking at what is best for our state, then the answer is clear. The Nebraska budget cannot afford the costs of Medicaid expansion nor the cost of a state based exchange. I realize that this goes against our industry associations but it is time to be realistic about what needs to happen. Let’s make a difference in Nebraska and ultimately in other states by our example.
Lastly, as I have mentioned numerous times, get involved in the November election. Not only at the Federal level by electing Deb Fischer, Lee Terry, and Mitt Romney but also talk to our potential state senators to find out their opinions on exchanges and your industry. You have to realize that every vote matters.