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Nebraska gov. rejects state-run health exchange

Associated Press Published: November 15, 2012

LINCOLN, Neb. (AP) — Nebraska will not operate its own health insurance exchange because a state-run program is too expensive, Gov. Dave Heineman said Thursday.

Instead, the Republican governor opted for a federally run program, even though some lawmakers and health care advocates have touted a state-based exchange as the best option. Heineman said creating a state exchange would have cost Nebraska taxpayers $470 million more than defaulting to a federal exchange.

The exchange will serve as a marketplace where individuals and small businesses can comparison shop for health insurance online, over the phone or through an agent. Supporters of President Barack Obama's health care overhaul argue that the transparency will ultimately push costs down, while many Republicans view it as a government intrusion into the private marketplace.

"The reality is that the federal health care law is being totally dictated and totally controlled by the federal government," Heineman said at a news conference Thursday.

His announcement came one day before the deadline for states to confirm whether they'd create their own exchange or rely on the federal government.

"On the key issues, there is no real operational difference between a federal exchange and a state exchange," the governor said.

Heineman said he initially favored a state-run exchange, but a budget review from his office showed a federal exchange was cheaper: $176 million as opposed to $646 million between the fiscal years of 2013 and 2020. Heineman also said the state-run option was also full of federal mandates, and Nebraska would have little real control.

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