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Exchange board members will face some pointed questions during confirmation hearing

Exchange board members will face some pointed questions during confirmation hearing

Idaho Freedom Foundation staff
January 22, 2014
[post_thumbnail]Sen. Jim Guthrie, R-McCammon, says he has a number of questions to pose to exchange board members when they appear before the Senate Commerce and Human Resources Committee for a confirmation hearing.

Some members of the Idaho Senate have their sights set on the board members who oversee the state’s government-run insurance exchange. They will get their chance, according to Sen. John Tippets, R-Montpelier, when the Senate Commerce and Human Resources Committee begins the process of confirming the board members later this month.

“I want to know how the board is operating in terms of our state’s open meetings laws and public records requests,” said Sen. Jim Guthrie, R-McCammon, a member of the committee. “There is some question as to whether or not the exchange board is even required to comply with those laws, but we need transparency and I will be asking them about that.”

Guthrie also raises concerns about the exchange’s executive director, Amy Dowd, concerning her salary (Dowd is one of the highest-paid government employees in Idaho earning a larger salary that the governor), as well as her controversial decision to award a $375,000 contract to Frank Chan immediately after he had resigned from the board, an event that sparked a firestorm of controversy last October.

“There’s just a lot we don’t know about that,” Guthrie told IdahoReporter.com. “I want to know what were the events that led to that decision, who advised her (Dowd) to do that. So I’ll be asking the board members about it.”

On this point Sen. Jim Patrick, R-Twin Falls, vice chair of the committee, agrees with Guthrie. “I will be asking the board members if they will make sure to never award a contract like that again. I’ll also ask them how they intend to make sure that it never happens again.”

Sen. Todd Lakey, R-Nampa, who also serves on the committee, said that he intends to inquire about data security with the exchange. “Obviously the rollout was a big mess. I do think, however, that they’ve fixed many of the problems. Given that the website is operating on a federal platform, I want to know what portions of data do we control and do we not control.”

Despite the Legislature specifying last year that the Idaho insurance exchange was to have been “state based,” the board of directors chose to use a federal government web platform almost immediately after the board was formed.

Lakey said that “I think they did what they had to do. But I also know that remaining on a federal web platform is not the long-term plan, and I will ask about that.”

Despite a provision in state law that requires it, the members of the exchange’s board members were able to begin their work in April of 2013 without being confirmed by the Senate.

According to Brian Kane, deputy attorney general, Otter was able to navigate around the need for Senate confirmation of the board members because of how he timed their appointments.

“The insurance exchange bill was signed in to law by Gov. Otter on March 28,” Kane explained to IdahoReporter.com. “The Legislature adjourned on April 4, and then the governor appointed the board members on April 10. According to Article 4 Section VI of the Idaho State Constitution, the governor can fill vacancies on boards by himself when the Senate is not in session, so the governor’s appointments stand without Senate confirmation, and this was all done in accordance with the law and the constitution.”

During last year’s session of the Legislature, a central point of debate was whether the Idaho insurance exchange would be overseen adequately by those in elective offices who are in turn directly accountable to the public, or merely by appointees of the governor.

For example, at a February 2013 meeting of the Senate Commerce and Human Resources Committee, former Sen. Branden Durst, D-Boise, said that “legislators need to think very carefully whether or not we want to abdicate our authority to a governing board,” adding “why is it that the governor, the executive branch, seems to have final authority over this?”

Durst was the only member of the committee to vote against the insurance exchange bill. He resigned from the Senate in December of 2013 because he relocated out of Idaho.

Similarly in March of last year, House Majority Leader Mike Moyle, R-Star, debated against the insurance exchange bill, noting that the exchange would be a nongovernmental entity “consisting of unelected folks who will tax us and make our decisions.” During debate on the House floor, he asked fellow House members “Have you really read this bill? If you want a state exchange, then have the state involved in running it for cryin’ out loud.”

While the launch of the insurance exchange is currently funded by grants from the U.S. Department of Health and Human Services, it is structured so that it must eventually become fully self-funding with taxes that are charged on insurance policy purchases. One of the arguments in favor of creating the insurance exchange in Idaho was that if the federal government were to create an exchange in the Gem State, it would charge consumers a 3.5 percent tax on policy purchases, but a state-based exchange could hold the tax at 1.5 percent.

On this point, Guthrie said that “I want to ask the board members if we can really maintain that rate. There was talk earlier last fall that they may need to raise the tax in order to fund the exchange, but we created the exchange in part to keep the tax rate down, so I’ll ask them about that.”

According to Tippets, the confirmation process will begin in the committee, but each board member will then need to be approved by a vote of the full Senate.

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