With one of its members calling the first two weeks of operation a “dismal failure,” the board of directors for Idaho’s government-run health insurance exchange met Wednesday for nearly two hours to discuss the exchange’s operational problems and its future.

“We have continued to escalate our concerns about the functionality of the federal platform (the federal Obamacare web system),” said Amy Dowd, executive director of the Idaho insurance exchange. “Our federal liaison assures us that the feds are working around the clock to fix this.”

Board member Hyatt Erstad said that he had attempted to log in to the exchange, but the system “kicked me out.” He also said that he could not verify any insurance applications that had been driven by the exchange, except for 51 applicants received by Blue Cross of Idaho. “Nobody has a clue about what’s going on besides Blue Cross,” he commented.

However, board member Scott Kreiling, president of Regence Blue Shield of Idaho, replied that his company had verified one new insurance applicant from the exchange. Likewise Richard Armstrong, director of the Idaho Department of Health and Welfare, added that another company had achieved 15 applications as well. Armstrong is a non-voting board member.

“OK, so we’re closing in on a big 75 applicants,” Erstad said. “This is very disconcerting.”

“This is nowhere near the estimates that we were given by consultants two years ago,” said Stephen Weeg, chairman of the board for the exchange. “We haven’t even gotten out of the gate yet, let alone begun to taxi.”
Erstad explained to the exchange employees attending the meeting that, in his view, the fact that an individual has to enroll in the federal government system and divulge extensive amounts of personal data into the exchange website before they can shop for insurance plans is a significant inhibitor to insurance plan sales.

“Our staff absolutely has to stress to our federal partners that this needs to change,” Erstad said. “The feds have got to change this so people can log on and shop without divulging personal info. Either that or we may need to consider paper applications, which would be a mess, but that may be where this is going anyway.”

Weeg announced to the board members that he and Dowd had received a formal letter from the Association of Health Plans (AHP) expressing concern to the staff and board members about one of the exchange’s recent solicitations for website development work. According to the AHP, the solicitation from the exchange did not specify that a prospective web developer would need to design the future Idaho insurance exchange website in such a way so as to allow customers the convenience of “direct enrollment” in an insurance plan.

Solicitation for outside contractors to provide services to a government agency or project is usually a very formal process and generally involves the solicitation of “requests for proposals” (RFPs) from prospective contractors by the government entity.

According to Weeg, the AHP was concerned that, as the current federal Obamacare website is structured (to which the Idaho exchange website links), insurance exchange customers will have to repeat the enrollment process through the federal website with each passing year of participating in an insurance plan.

The AHP wants Idaho’s website to allow for “direct enrollment” without requiring customers to “re-enroll” in a government website after the first year, and also wants Idaho’s RFP for web developers to specify that Idaho’s insurance exchange must be built this way.

This concern precipitated a lengthy discussion about whether the exchange should change its RFP process, thereby delaying the launch of what will be an Idaho-based insurance exchange website. “We now know, given what a disaster it has been, that staying on the federal system is no longer an option,” Armstrong stated as he urged the board to stay with the current RFP process and schedule and not delay the website development.

Rep. Kelley Packer, R-McCammon, a voting board member, suggested that the RFP process and website development be delayed to ensure that federal funds would be used to develop all of the website, including the direct enrollment mechanism.

On a motion, however, the board voted in favor of keeping the current RFP process in place and to not delay the website development, with Packer the lone “no” vote.

The board also was told that board member Frank Chan, owner of Applied Computing of Boise, had resigned from the board because he has been offered a contract by the exchange staff to help build the future website. “Frank and his company were chosen because of Frank’s extensive background in state-based marketplaces,” Dowd explained.

After the meeting IdahoReporter.com contacted Packer to ask if she had prior knowledge of a bidding process that may have precipitated Chan’s selection to sell web development services to the exchange. She said she did not have prior knowledge of this, but suggested that the selection of Chan may have occurred by a vote of a board subcommittee, and not the full board itself.

Weeg reminded board members that, in accordance with the state law that created the exchange, the board would soon need to submit a report to Gov. Butch Otter updating him on the progress and development of the exchange.

“We need to tell him that the whole system has been a dismal failure and that we’re working to create our own state-based platform,” Erstad said.

“We also need to be cognizant of the fact that we are still in a very political environment,” Weeg added. “There is already a call for the law (the law creating the exchange) to be repealed. We need to craft this document to the governor very carefully.”

“This hasn’t been all bad news,” Armstrong told the board members. Noting that the Idaho insurance exchange is successfully connecting Medicaid-eligible persons with the federal Obamacare website system, he said "it can be done; it's all in the art of the deal.

Near the conclusion of the meeting, Packer suggested that in an upcoming meeting the board members must make a priority of discussing contingency plans for the exchange.

“That’s a very important point,” Weeg stated. “Our first priority is figuring out how Idahoans will be allowed to buy insurance plans if the federal website continues to falter. Our secondary priority is having a plan in place for what we will do if this whole thing implodes.”