Feds back down on insurance assistance

Friday, March 24, 2006 | 7:15 a.m.

CARSON CITY With an estimated 1 in 6 Nevadans without health insurance, the 2005 Legislature and Gov. Kenny Guinn agreed to significantly expand coverage for low-income residents.

Congress and the Bush administration, however, put a crimp in the state's effort.

State officials want the federal government to pay for more than half of the $22.4 million plan, but federal officials are questioning whether parts of the state's plan are eligible for the money.

And the federal Deficit Reduction Act passed by Congress this year makes other parts of the plan ineligible for federal money.

"It's a chink in our armor," said Mike Willden, director of the state's Health and Human Services Department.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, who pushed for the plan, said the law changed the rules in the middle of the game.

"It was a slap in the face to Nevada," she said.

The state was banking on the federal government to put $14.3 million into the new program, but now it's unclear how much the state is eligible to receive. It's also unclear if any part of the program will start as expected on July 1.

The plan passed by the Legislature would do three things: expand health coverage for pregnant women, help small businesses provide insurance and add catastrophic injuries and illnesses coverage to Medicaid.

Willden said the program to expand coverage for pregnant women could be started quickly and by July 1 if the federal government grants the state a waiver - the federal government is supposed to approve the package as a whole before any part can move forward.

The other parts of the plan, however, face some challenges.

The insurance coverage for small business, championed by Buckley, will take a hit under the new law. It is designed to pay 50 percent of the health insurance premiums for workers at businesses that employ between two and 50 people. It would also give employees $100 a month to help pay for their premiums.

The program would cover 2,000 employees the first year and expand to 8,000 over four years.

But the new federal law won't allow payments for workers without children.

"I'm shocked they did this to a successful innovative program," Buckley said.

Willden said the change in the law restricting subsidies for low-income workers without children is "not a deal breaker." He said there are still many Nevadans who would qualify for this program.

But Buckley said that would create a disparity, as businesses would be able to offer only some employees health insurance.

To be eligible for that plan, a person has to make less than 200 percent of the federal poverty standard. A family of four, for example, could not earn more than $40,199, according to state officials.

Federal officials are also questioning how the state would pay for the catastrophic illness coverage and aren't sure federal money could be used.

Chuck Duarte, chief of the state's Health Care Financing and Policy Administration, was in Washington last week to push for the state's program and said the federal government wants more information .