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Health insurance attorney, Idaho senator clash over defining ‘nonprofit’ health care exchange

Health insurance attorney, Idaho senator clash over defining ‘nonprofit’ health care exchange

Mitch Coffman
October 22, 2012
Mitch Coffman
October 22, 2012

The legislative task force looking into whether or not to set up a state health exchange and how to deal with Medicaid in Idaho met on Monday and the most intriguing presentation came concerning the state setting up a nonprofit state-based insurance exchange.

The Idaho Legislature's Health Care Task Force is a joint Senate-House committee composed of 14 senators and representatives. What it heard Monday afternoon in one presentation was a clear difference of opinion on what constitutes a nonprofit exchange.

The presentation was given by Jack Rovner, a founder of The Health Law Consultancy in Chicago. Rovner’s firm also represents health insurance companies, including in Idaho.

Rovner said that Obamacare allows for establishing either a government agency or a nonprofit established by the state. He said setting up a nonprofit exchange is a private market solution. “The option will preserve, for the state of Idaho, control over the health insurance exchange even with key aspects such as government structure, its operation and how it pays to operate itself, its finances.”

The nonprofit would need to be set up either through legislative action or executive action, Rovner said, including the state would have to execute some oversight over the nonprofit.

But Sen. Steve Vick, R-Dalton Gardens, questioned Rovner’s assertions about setting up the nonprofit corporation for the health exchange and if a nonprofit is truly a private option. “There’s no competition. And, we (state) appoint all of the board members and all of the things mentioned here. It doesn’t really seem like a private market solution. It just seems like a different way to have the government do it.”

Rovner said the nonprofit would be set up by the state and that the state would determine how it operates, but that it would not be a government agency.

There are a few minimum requirements in order to set up the nonprofit, according to testimony heard by the committee. First, the board for the nonprofit must be made up of a majority of those with experience in health care delivery. That means members of the board should be made up of health insurers, agents, brokers and hospitals.

“Logically, we would want an informed board of people who have knowledge of what the health care delivery system is so that the nonprofit entity can be successful in delivering the kinds of products and services” desired, said Rovner.

However, the majority of the board, he explained, cannot be controlled by the health insurance industry or anyone who makes their living by selling health insurance, such as agents or brokers.

Still, Vick was skeptical of Rovner’s definition of nonprofit and it being a private solution.  “If there’s no competition, then it’s really a quasi-government operation anyway. It just seems like we give up some control without gaining much.”

The legislative task force and two committees appointed by Gov. Butch Otter—one to look into health care exchanges and another to consider what to do with Medicaid in Idaho—are scheduled to report their findings and recommendations to the governor in November and as the state’s lawmakers consider how to deal with Obamacare.

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