Last week, I made you aware of issues facing the property and casualty insurance industry and the real impact these issues are having on constituents throughout the District. This also includes the numerous insurance agents who work every day to help their clients stay insured and at the best rates possible.

This week, I want to focus on the health insurance industry and the never-ending struggle of balancing the cost of insurance coverage with the cost of delivering quality healthcare. I have had the opportunity to serve on the board of Great Plains Health over the past few years. It has been a great experience and learning opportunity that has better prepared me to serve in the Nebraska Legislature.

As I reflect on my long banking history, I have always known that economic development begins with having quality, affordable healthcare available. The North Platte region is fortunate to have such an amazing facility to serve everyone in District 42 and beyond. Think about how you would feel if we did not have a highly rated emergency department available or an outstanding cancer center, a fantastic neurosurgeon, and a supporting team of doctors and nurses who care about their patients. But this kind of quality health care is expensive to provide.

After complying with the mountain of compliance requirements, hospitals that accept Medicare and Medicaid provide care to patients but are reimbursed at rates well below their costs. Couple that with the fact that many uninsured patients come to the emergency department daily who have no means of payment. In the end, it is those who are covered with health insurance who make up the difference in funding necessary to operate at a minimal profit.

To reduce the costs to policyholders or employer-sponsored health care plans, insurance companies provide “Medicare Advantage” plans. It is important to note that Medicare Advantage plans are, in fact, private insurance products, not Medicare. If you purchase a Medicare Advantage plan, you are no longer enrolled in Medicare. You can always cancel the Advantage plan, but you are not automatically eligible to enroll in Medicare. In fact, your premium could very likely be higher if you later apply for Medicare. A Medicare Supplement policy is also an insurance policy, but it is truly a supplement to Medicare, and you remain enrolled in Medicare.

So why are insurers pushing the Medicare Advantage plans? The answer is simple. Medicare Advantage plans are highly profitable policies that limit coverages, primarily through “pre-authorization” requirements. For example, if a patient is admitted to the hospital and the hospital administers treatments prior to receiving a pre-authorization (which can sometimes take days), then the provider does not receive any payment for their services. This leads to delayed treatments, or the hospital or other providers not getting paid. As a result, many providers have chosen not to accept Medicare Advantage as a payment source. When this happens, those insured by a Medicare Advantage policy must travel further from home to find a provider who accepts this coverage. Even though more employers are moving to Medicare Advantage policies to save costs, we are seeing more and more providers move away from accepting this type of coverage. Rural areas tend to see fewer providers, but we are also seeing this trend in urban areas.

As costs of healthcare rise, we will likely see more challenges when it comes to keeping hospitals open and quality healthcare available to everyone, but especially those living in rural areas.

I remain committed to finding ways to help lower healthcare costs. Adjusting Medicaid reimbursement rates will be an important step in relieving some of the pressure. If providers can lose less money when providing treatments for Medicaid and Medicare patients, then fewer costs will need to be made up by those with private insurance. In turn, insurers won’t have to resort to plans like Medicare Advantage to find premium rates that appeal to employers. I have sponsored an interim study to explore Nebraska’s provider rates and solutions to this issue.

I look forward to continuing to hear from you regarding issues that are important to you. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or by calling my legislative office at 402-471-2729.