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Former Sen. Ben Nelson Takes the Reins at NAIC

By Jane Norman, CQ HealthBeat Associate Editor

January 22, 2013 -- A just-retired Nebraska senator who was the inspiration for the famous "Cornhusker Kickback" claim attached to the health care law is the new CEO of the influential National Association of Insurance Commissioners (NAIC), the group announced last week.

Ben Nelson, a moderate Nebraska Democrat who decided to not seek a third term in 2012, is a natural for the NAIC slot given his background as the director of the Nebraska Department of Insurance in the 1970s and CEO of Central National Insurance Co. from 1977 to 1981. Nelson also worked as executive vice president and chief of staff for the NAIC in the 1980s.

"After years in government, this is a homecoming for me," Nelson said in a statement. NAIC officials said Nelson will serve as the NAIC's chief advocate and spokesman in Washington, signaling a more prominent profile in the nation's capital for the organization of state insurance regulators. The NAIC already has offered extensive advice and recommendations to the Department of Health and Human Services as the agency rolls out regulations on the overhaul.

"Senator Nelson's impressive credentials and deep knowledge of state insurance regulation are simply unmatched," Jim Donelon, elected president of NAIC and Louisiana insurance commissioner, said in a statement.

Donelon also said that "Senator Nelson has a keen understanding of the insurance marketplace, which will make him an effective advocate for the preservation of our state-based system of regulation."

But when it comes to health care, it's Nelson's role in the debate over the health care law (PL 111-148, PL 111-152) that's most memorable. The "Cornhusker Kickback" he was alleged to have obtained in exchange for his vote—a pot of money to finance the Nebraska Medicaid expansion—was even cited by Justice Antonin Scalia during the Supreme Court oral arguments over the law.

Nelson and his aides, though, have long maintained that his position was misunderstood and his vote in favor of the overhaul hinged on much more than a deal just for his home state.

Nelson was worried about what the cost of the law's Medicaid expansion would be to Nebraska, and so he asked Senate leaders to expand the Medicaid funding for all states, Nelson and his aides have said. Senate Democratic leaders then put in the Nebraska provision as a placeholder because they didn't have a dollar estimate for the cost to all the states, Nelson said.

In addition, he said he was opposed to any possible option in the bill for people to sign up for a government-run insurance program, and he was worried about funding in the bill for elective abortions. "The Medicaid was important, but it was not a condition for my support," Nelson told Fox News in a 2010 interview.

Nebraska's governor ultimately decided against a Medicaid expansion after the court ruled that states could opt out without losing all their Medicaid funds.

According to a statement from NAIC, Nelson will work with federal and international governments, state government associations, consumers, and insurance industry representatives. "His rare and valuable combination of experience in insurance and government will be a tremendous asset to our organization," Donelon said.

Nelson will replace Andrew Beal, who has been acting CEO since November, when Therese M. Vaughan left the position of CEO. Vaughan, the former Iowa insurance commissioner and a former NAIC president, had been CEO since 2009. Beal will resume his position with the NAIC as chief operating officer and chief legal counsel.

Nelson will actually be holding down two jobs. In a separate announcement, the Washington communications and public affairs firm Agenda said Nelson will join as a senior adviser "and provide clients with high-level policy and political guidance." He is not yet able to lobby because ethics rules prevent a senator from lobbying until two years after leaving office.

Craig Pattee of Agenda said members of the newly created advisory board at the firm will be senior officials with extensive policy and management experience in state and federal governments.

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