Nebraska is one of about 30 states that already has a high-risk pool. The new program still will be available to Nebraska residents, but Heineman's decision means it will be operated by the federal -- rather than state -- government.
In the letter to U.S. Health and Human Services Secretary Kathleen Sebelius, Heineman said he and the state's top insurance official were concerned federal funding wouldn't be enough to pay all the insurance claims after the program expired in three years. The high-risk pool being started by the federal government is meant as a stop gap until 2014, when insurance companies won't be able to turn people away based on their health conditions.
"With so much financial uncertainty, the state of Nebraska cannot afford to subsidize a second high-risk insurance program," the Republican said in the letter.
A state senator said the decision was politically motivated and hands power to Washington bureaucrats.
"We're ceding power to the federal government to dictate how the program would be run," said state Sen. Jeremy Nordquist of Omaha, a Democrat. "It's unfortunate we're playing politics."
Nebraska Attorney General Jon Bruning has joined 19 other state attorneys general challenging federal health care reform, a fact Heineman pointed out in a letter to state lawmakers notifying them of his decision to turn down the federal program.
"As you know, most Nebraskans are opposed to this legislation because it will raise taxes, cut Medicare and premiums will continue to increase," Heineman said in the letter to lawmakers. "I share their concern."
The current high-risk pool in Nebraska, the Nebraska Comprehensive Health Insurance Pool, was created in 1985 and has 4,820 participants.
The federal program likely would have lower premiums than the Nebraska-run program but participants would have to have a pre-existing medical condition and have been without health insurance for at least six months.
State Insurance Director Ann Frohman estimated that between 1,500 and 5,000 Nebraskans might participate in the federal program because it will have lower premiums.