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Health insurance exchange bill’s fiscal note changed on Senate floor

Health insurance exchange bill’s fiscal note changed on Senate floor

Idaho Freedom Foundation staff
February 12, 2013
[post_thumbnail] Sen. John Tippets asked for revision to the statement of purpose and the fiscal note for the health insurance exchange bill.

Last week, the Senate Commerce and Human Resources Committee approved Senate Bill 1042, Gov. Butch Otter’s health insurance exchange legislation, and sent it to the full Senate for a vote.

Tuesday the statement of purpose and fiscal note were changed on the Senate floor. Some Senate members believe that the legislation contained faulty information about its fiscal impact.

Customarily, bills before the Legislature contain what is known as a “fiscal impact note,” which is an estimate as to how much the implementation of the bill will either cost or add to the state’s general fund. Before the requested change, SB 1042 stated that its fiscal impact is “zero.”

It now says the fiscal impact would be via federal grants, totaling $30 million, with no impact on the general fund.

Sen. John Tippets, R-Montpelier, told the full Senate Tuesday that the bill currently contains faulty fiscal information, and was granted consent from the full Senate to revise it. Tippets is chairman of the Senate Commerce and Human Resources Committee, the same committee that approved the bill to move forward five days ago.

“An exchange is a website that provides information about insurance plans and links to their providers,” said Sen. Dean Cameron, R-Rupert, back on Dec. 4. “Nothing more and nothing less.”

Yet the members of the full Senate apparently don’t agree that an insurance exchange would be built with no costs involved, as the language of SB 1042 stated.

The procedural move by the Senate comes at a time when questions and concerns have arisen outside the Senate about the costs of creating an insurance exchange. On Tuesday, Feb. 5, prior to forwarding the bill to the full Senate, the commerce committee heard testimony from Otter’s chief of staff, David Hensley, who said that the governor estimates the costs of creating an insurance exchange to be approximately $20 million, and that there are “federal funds available” to cover these costs.

If, indeed, the creation of an insurance exchange is paid for with federal funds, that would likely not entail a cost to the state’s general fund. However, last year Otter’s insurance exchange task force heard testimony from multiple private companies that estimated the costs of building an insurance exchange for Idaho to be in the realm of $70-$80 million.

For example, on Oct. 29 of last year, Leavitt Partners, a consulting firm from Utah, presented a plan to build an insurance exchange, estimating a price tag of $70 million.  On Oct. 9, the KPMG global consulting firm proposed to the governor’s task force a price tag of $77 million for the same insurance exchange project.

“The numbers you referenced are accurately quoted from the governor’s task force last October,” Jon Hanian, press spokesperson for Otter, told IdahoReporter.com. “However, those figures were always about starting a health insurance exchange from scratch, and a lot has changed since then. Many states have already advanced components for the exchange. Long story short, we will not now need to build the exchange from the ground up, and that’s why the costs that Mr. Hensley cited were so much lower.”

Rep. Brandon Hixon, R-Caldwell, expressed concerns that Otter’s insurance exchange bill does not allow for the Legislature to exercise oversight with the exchange program itself. While noting that he has not decided how he will vote on the matter should it be taken up in the House of Representatives, Hixon told IdahoReporter.com that an insurance exchange “should not be guided by the executive branch alone.”

Hixon’s concerns echo those of Sen. Branden Durst, D-Boise. Durst, who also sits on the Senate Commerce and Human Resources Committee, was the only committee member to vote “no” on Otter’s bill when it was passed in the committee.

“Legislators need to think very carefully whether or not we want to abdicate our authority to a governing board,” Durst told IdahoReporter.com after casting his committee vote. “That’s not a place where I’m willing to go—yet.”

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