T-HIP could be the solution for 77,000 Hard-Working Nebraskans

Last week, a bipartisan group of state senators – Sen. John McCollister, Sen. Kathy Campbell, and Sen. Heath Mello – unveiled a new health coverage bill. It would make affordable health coverage accessible to 77,000 uninsured Nebraskans who cannot afford insurance.

The Transitional Health Insurance Program (T-HIP) uses the private health insurance market to help 77,000 working Nebraskans gain access to health care. Referred to as “premium assistance,” this approach enables families with too much income to qualify for traditional Medicaid coverage, but not enough to qualify for premium assistance tax credits, to purchase private market health insurance plans. Several states, including Arkansas, Iowa, and Indiana, have successfully used this approach.

“Every Nebraskan needs to be able to afford health coverage, but too many of our hard-working friends and neighbors have been left out of our health care system,” Sen. McCollister said.

Sarah Palmer is one of the Nebraskans who would benefit from this program. Sarah fell into the health coverage gap when she moved to part-time work to take care of her father, who had Parkinson's disease. Shortly after, she was hospitalized herself and quickly racked up sizable medical bills. A situation familiar to many others here in Nebraska and elsewhere. Sarah said she doesn’t want an entitlement, but she needs a little bit of help.

An overwhelming number of the 77,000 Nebraskans without access to health care work in jobs that either do not offer insurance benefits or do not pay enough to allow workers to access insurance on their own. For those who are not working, the bill provides for referrals to job training and job placement services, as well as health coverage. T-HIP further addresses this by requiring that enrollees contribute at least 2% of monthly household income to help pay health insurance premiums. It increases co-payment for non-emergency ER use to $50.

Uncompensated care has declined by 16% in states such as Iowa, Arkansas, and Indiana that have expanded access to health care. This is especially critical for rural hospitals, 35% of which operate at a financial loss. A recent study by the University of Nebraska Medical Center estimates that an approach similar to that included in the Transitional Health Insurance Program will reduce by 72% the amount of uncompensated care provided by Nebraska health care providers.

This bill is especially important for rural Nebraska’s economy, built almost exclusively on small businesses and their employees. Fewer than half of Nebraska’s small business employees are employed by firms offering employer-sponsored health insurance. That leaves the majority of workers to pay the premium and other out-of-pocket costs for health insurance coverage. That money is not available to cover other important expenses, which harms the local economy.

The Rand Corporation found that a state decision to reject federal funding to expand access to health insurance will also increase premiums an estimated 8-10% in that state's individual market. Here in Nebraska, that means we’ll all pay more on our premiums when we deny affordable coverage to 77,000 of our fellow Nebraskans.

Rebecca Gould, Nebraska Appleseed  Executive Director and Center for Rural Affairs board member, explained that this plan is good fiscal policy and good health policy. It will create 10,000 jobs in Nebraska, bring approximately $2 billion taxpayer dollars back to Nebraska, and do the right thing for 77,000 of our friends and neighbors.

You can see the Center's talking points on the Transitional Health Insurance Program here.