Health care law puts state in insurance business

The health care legislation newly approved by Congress and President Obama has put the state of Nevada temporarily in the insurance business.

Health and Human Services Director Mike Willden said Friday the legislation mandates creation of "high risk pools" by states to provide insurance to people who can't get health coverage elsewhere.

"Obviously the overriding issue is all individuals and families have to have health coverage by 2014," said Willden. "We've got to figure out how that's going to

happen."

But the problem begins almost immediately since the law prohibiting insurers from denying adults coverage for pre-existing conditions doesn't kick in until January 2014. Until then, those adults who can't get coverage from their employer, their union or privately will get coverage from the temporary high risk pools set up to provide that coverage. The ban on using pre-existing conditions to deny children coverage takes effect immediately.

To be eligible, a person has to be a U.S. citizen who hasn't been able to get credible coverage for the last six months.

Willden said fortunately, the federal government put $5 billion in the legislation to pay for operation of those last-resort insurance pools. Nevada's potential share, he said, is $60 million to

$65 million.

But he said the state is on a very tight timeline to decide how to handle that mandate. The deadline is April 30 for the state to decide whether to set up its own high risk pool, join a group of states in creating a pool or do nothing, in which case the federal government will come in, set up the pool and operate it.

Gov. Jim Gibbons, Willden said, has ordered him and officials from the insurance division to evaluate the best solution for Nevada. To do so, he said he will ask the Board of Examiners and legislative Interim Finance Committee for $279,000 next week to hire consultants and staff.

"The high risk pool is supposed to be implemented immediately but go away in 2014 when other regulations come in," he said.

After that decision is made, Willden said the state has to create an exchange that will centralize access to all licensed insurance carriers and their health care plans. Starting January 2014, he said it will be "the place where people will go to be able to find out what insurance products are available."

He said those decisions are just the start of the work his department, the insurance division and other parts of state government will have to do to comply with the health care law.

He said the big problem he sees down the road will be helping people navigate the complex rules.

"A lot of people, I think, are going to be challenged to understand this whole system," he said. "Am I eligible? Must I get employer coverage? Certain employers will be issuing employees vouchers, eligibility for subsidies, tax issues. There are lots of issues."

And he said Nevada only has three and a half years to get everything in place.