(Note: This is the second installment of a two-part interview with Rep. Janice McGeachin,R-IdahoFalls, chairwoman of the House Health and Welfare Committee, concerning a possible health care exchange.)

There is a storm brewing in the Idaho Legislature over the creation of a state-based health exchange program. Lawmakers have some serious questions about how it will operate and the effect it will have on the insurance marketplace.

More specifically, Rep. Janice McGeachin, R-IdahoFalls, told IdahoReporter.com that she is concerned about the subsidies handed out through the exchange and how health insurance agents will fare if the program is implemented.

One of the reasons a number of groups are pushing the exchange is the subsidies it will provide for consumers, paid directly to insurance companies on their behalf. Families of four earning up to $88,000 annually will qualify for federal subsidies, but only if they go through the exchange to purchase their insurance.

While McGeachin sees the positives of families having access to artificially cheaper insurance plans, she worries about the overall fiscal impact of subsidies. “Our country is bankrupt,” McGeachin said. “Our country is going broke, and that’s before this thing (federal health reforms) goes into effect.”

The Kaiser Foundation explains that subsidies could cost at least $350 billion between 2010 and 2019. It’s unclear how much Idahoans would collectively receive each year from the subsidies.

McGeachin says her concern is about the amount of funding that will pass through the exchange. “It’s a lot of money that’s at stake,” she said. “We have some big issues, some big questions, some big decisions we’re going to have to make.”

As the chairwoman noted, subsidies will only be available through the exchange, meaning that Idahoans looking for the best deal on insurance will likely use the program.

But that could leave insurance agents out in the cold.

Sen. Dean Cameron, R-Rupert, an insurance agent, joked last week at the end of a health care task force meeting that the exchange would likely lower his income. But the reality of his statement isn’t a joke.

Penny Schwiebert, project manager with the Department of Insurance, told attendees at a December exchange learning session that subsidies are the sole reason families would purchase insurance through the program rather than use an agent.

It’s unclear how any ofIdaho’s more than 5,000 health insurance agents will interact with the exchange program. The exchange itself is planning on hiring navigators, or workers who cannot receive commissions from insurance companies, but rather are paid directly by the state. Navigators will serve a similar mission as agents do, including outreach and public education efforts.

McGeachin says even state lawmakers who work in the insurance industry don’t know how they are supposed to handle the exchanges and its clientele. “They don’t know how to answer that question,” McGeachin said.

She warns that if the state pursues creation of the exchange, legislators will have to be careful about the relationship between the exchange, navigators, and agents. “The law really only clarifies what the role of the navigators is,” McGeachin said. “But it really doesn’t address the role of the agent. I don’t think people really know yet how that’s supposed to work.”

McGeachin plans to safeguard against the exchange sending customers to some agents or companies over others.

Video for the interviews by Mitch Coffman, IdahoReporter.com.