During a five-hour meeting at the Capitol Tuesday, the board of directors for Idaho’s government-run health insurance exchange approved several new plans to expand its operations and OKed plans to undertake the construction of new charter and operational documents, but voted against two staffing additions proposed by executive director Amy Dowd.

“We are keeping local control in Idaho, and making Idaho-based decisions, despite problems with the federal website,” Dowd told board members of the exchange’s current web operations. “We will need to transfer off of the federally based web platform, hopefully by fall of 2014, and we will need to be sustainable by 2016.”

Noting that the creation of a state-based insurance exchange for next year will entail “many, many vendors,” Dowd sought permission from the board to add to hire an accountant, a policy analyst and an information technology (IT) professional. The IT position Dowd requested is the same one she sought to fill when in a controversial move she offered former board member Frank Chan a $375,000 no-bid contract last month.

“I don’t think we need a new IT person on staff,” board member Zelda Geyer-Sylvia, an executive with Blue Cross Insurance of Idaho, said in response to Dowd’s proposal. “Quite frankly, I think it’s more important that our staff understand our business model, that’s our priority.”

Geyer-Sylvia also questioned Dowd’s plan to hire an insurance policy analyst and how that staff position might replicate functions that are already carried out by the Idaho Department of Insurance (DOI).

“What exactly is the role of the DOI in your plan?” Geyer-Sylvia asked.

“There will be intense details and processes that the DOI will be involved with,” Dowd said, adding that the insurance exchange must have a dedicated staffer to interface with DOI.

“Ms. Dowd, It would be helpful to know in the future, because I clearly don’t know now, what precisely you think the exchange’s role is with the DOI,” commented board member Dave Self, an executive with Pacific Source insurance plans. “It seems that some of these functions fall under the purview of DOI, and it appears that you’re saying that there are regulatory functions to be set by the exchange that carriers will be held to.”

Bill Deal, director of the DOI, and a non-voting member of the exchange board, responded to Self: “We will review plans and set rates as we always have,” Deal said. “What Amy is talking about has to do with connectivity between the Department of Insurance and the exchange.”

Dowd also told board members that with the addition of numerous new vendors working on the exchange project, the exchange will likely end up in a situation of “vendors managing vendors,” adding that such a scenario brings vulnerabilities to the exchange.

“I am confused by your assertion of vendors managing vendors,” Geyer-Sylvia stated. “I would presume the staff, even you personally, would work directly with vendors, is that not correct?”

“I call it out as an awareness right now,” Dowd replied. “It’s a risk that could happen.”

Dowd also told board members that despite the intent that Idaho’s health insurance exchange website will be fully “state based” in 2014, the U.S. Department of Health and Human Services (HHS) will still require the involvement of an independent auditor who will monitor the development of the new stated-based website. “It’s a quality control measure that the feds require,” Dowd explained.

The board members voted to reject the plans for both the hiring of an IT professional and a policy analyst, preferring instead to include the IT work with a separate and larger project services contract.

Board member Tom Shores asked Dowd, “Do you have any projection on what this (the IT services project) is going to cost?”

“We have estimated as far as our grant,” Dowd said. “So let me give you a range, it will be ranging between $1 million and $3 million, based on what we see in other states and what we feel we need in Idaho.”

The board did approve plans for the hiring of a full-time accountant, who will be an employee of the exchange and who will replace an individual who is currently providing bookkeeping services to the exchange under a limited, 20-30 hour a week contract.

Jeff Agenbroad, a board member who serves as the exchange’s treasurer, presented a proposed budget for fiscal year 2014, which ends in June of 2014. Agenbroad told the board members that he formulated his budgetary figures based on the assumption that the federal Medicaid health coverage plan will not be expanded in Idaho during the 2014 legislative session. The possible expansion of the program has been the subject of debate for most of 2013 with many health care providers benefitting from the program’s retroactive coverage.

“Are there no operational costs that would be impacted with Medicaid expansion?” asked board member Margaret Henbest.

“More people will come to the exchange and qualify for Medicaid,” explained Richard Armstrong, director of the Idaho Department of Health and Welfare (the state agency that administrates Medicaid in Idaho) and a non-voting member of the exchange board. “That will impact traffic to the website and so forth, but it’s not like you’d have to add new staff, do more training, and so forth.”

Documents from the U.S. Department of Health and Human Services (HHS) show that, thus far, more of Idaho’s exchange website visitors have qualified for Medicaid than have sought to purchase insurance. According to HHS, as of Nov. 10, some 1,597 Idaho website visitors were deemed “Medicaid eligible,” whereas only 338 had “selected” an insurance plan from the exchange website.

The board will meet again in early December.