Advocates for expanding Medicaid say lack of coverage a major factor in bankruptcies

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LINCOLN, Nebraska — A lack of health insurance is driving many of Nebraska's personal bankruptcies and shifting more costs onto hospitals and businesses, advocates who want Nebraska to expand Medicaid told lawmakers Tuesday.

Supporters are once again preparing to introduce a Medicaid expansion bill that would extend coverage to an estimated 54,000 Nebraska residents whose incomes are too high to qualify for Medicaid but too low to receive subsidies available under the federal health care law.

Tuesday's legislative committee examined the impact of Nebraska's decision not to expand Medicaid.

An advocacy group, Nebraska Appleseed, presented the legislative committee Tuesday with an analysis of bankruptcy filings from three counties in 2013. It found that more than one-fourth of the bankruptcy filers in Dawson, Otoe and Red Willow counties reported major medical expenses that accounted for at least 20 percent of their debt.

"A lack of health insurance is a clear theme running throughout, and the majority of the debt is held by local businesses within Nebraska's borders," said staff attorney James Goddard, who noted the report only identified medical debts that were "clearly labeled" in court filings, so the actual numbers are likely much higher.

Sen. Al Davis of Hyannis, who initiated a separate study of the impact, said the lack of coverage has contributed to bankruptcies, which become a drag on the local economy because he says banks, car dealerships and small-town grocers suffer.

"Medical bankruptcy causes hardship all across a community, but it is often the only choice for many of Nebraska's uninsured who are unfortunate enough to become sick," said Davis, who represents parts of western and north-central Nebraska.

Goddard said Otoe County in eastern Nebraska was chosen because it includes both urban and rural residents. Red Willow County in southwest Nebraska relies more heavily on agriculture, while Dawson County has a large population of slaughterhouse workers who often lack insurance.

Supporters have twice attempted to pass an expansion measure in the Legislature, but both times — in 2013 and in 2014— it was defeated in a filibuster.

Lawmakers who opposed the measure last session argued that the federal funding won't be sustainable over the long term, and Nebraska's share of the expenses could grow. Republican Gov. Dave Heineman has said the state's obligations would pull money away from other priorities, such as education. Gov.-elect Pete Ricketts also opposes Medicaid expansion.

Lincoln resident Amanda Gershon told lawmakers that she was forced into bankruptcy a decade ago, at age 22, because she couldn't afford the $60,000 in medical bills to treat an irreversible autoimmune disorder.

Her hair is falling out and she has lost 20 percent of her body weight in the last three months for reasons no one can explain. She has visited the hospital three times this year — twice because her heart wasn't beating correctly — and may have to seek bankruptcy protection once again.

"I can't keep doing this. I can't," she said through tears. "In the few years of my life that I had insurance, I had excellent credit. I had a home, I had vehicles, I had food on my table, I had no worries. ... But left with no insurance, I'm back to that starting point again."

If lawmakers fail to act this year, Sen. Jeremy Nordquist says supporters could take the issue straight to voters, as they did with the successful measure to increase Nebraska's minimum wage.

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