Members of the Health and Human Services Committee, my name is Jon Bailey, Director of the Rural Public Policy Program at the Center for Rural Affairs. I come before you today to offer comments in support of LB 887.

As you all know, the failure of Nebraska to approve and implement the Medicaid expansion under the Affordable Care Act has created a coverage gap that an estimated 33,000 Nebraskans have fallen into. The coverage gap has real and significant ramifications for our citizens. Over the past six months we have done and continue to do a series of Affordable Care Act educational presentations primarily in rural, northeast Nebraska, many in collaboration with the Elkhorn Logan Public Health Department, the Northeast Nebraska Public Health Department and the Northeast Nebraska Community Action Partnership. Of the approximately 320 people who have attended these presentations, we estimate 70 percent would be eligible for coverage under LB 887.

Some observations from these presentations include:

  • Contrary to some public, political posturing, people understand the need for health insurance and want themselves and their families covered.
  • People are often surprised and very disappointed to learn they are in the coverage gap, and, frankly, not happy to learn they are in the gap because of the state’s decision not to expand Medicaid.
  • There is essentially no help that that can be offered for these people. They do not qualify for insurance marketplace tax credits because of their incomes; because of that even the least expensive insurance on the marketplace is generally unaffordable; and their employers do not provide health insurance. All that we can do and all that the ACA navigators can do is tell them the truth and send them on their way disappointed, frustrated and still uninsured.

LB 887 could be critical to rural small businesses. Small businesses, including farms and ranches, are vital to the economies of rural communities, often being the only employers and economic force in many communities. The Center for Rural Affairs operates the Rural Enterprise Assistance Project (REAP), the largest statewide microenterprise development organization in the nation, providing loans and business assistance to businesses with 10 or fewer employees. In the nearly quarter of a century that REAP has existed to help start and expand small businesses in rural Nebraska we have noticed two happenings related to small businesses and health insurance:

  • Few small businesses provide health insurance to their employees. Every other year we survey REAP businesses on a variety of topics, including health insurance coverage. In our most recent survey in 2012, we found that over 74 percent of small businesses with employees do not offer health insurance to their employees. Cost was the primary reason cited why health insurance was not provided.
  • The lack of health insurance coverage provided by small businesses is causing uncertainty in the job market for employers. It has become more difficult for employers to retain workers without health insurance benefits, particularly if insurance is offered elsewhere. Employers invest in employees and need employees to reach the potential of the business. The churn in small business employment due at least partially to the inability to provide health insurance often damages the return on human investment and makes the potential more difficult to reach.

In rural Nebraska most employees of small businesses would be in the income level qualifying for coverage under LB 887. Providing the LB 887 option would benefit both the employees and their families and the small businesses that employ them.

The demographics, economy and the health insurance market in rural Nebraska make LB 887 critical for our rural residents. These people and their families rightfully deserve to be insured. It is simply immoral to enact a public policy of negligence that leaves them by the side of the road with no options and with the disappointment and frustration of being in the coverage gap. Most importantly, it is immoral to leave them without the ability to resolve their health care needs and without the tools to enhance their long-term health. LB 887 will allow those in the coverage gap to become healthier and responsible health care consumers.

For the financial and economic benefits to the state we urge the committee to advance LB 887. But most importantly, for the health and well-being of Nebraska’s people we urge the advancement of LB 887. 

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