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Insurance exchange: Was it the right move?

Insurance exchange: Was it the right move?

Mitch Coffman
November 19, 2013
November 19, 2013

Dr. John Livingston believes creating a state insurance exchange was the right call. But IFF President Wayne Hoffman disagrees. Below are both opinion pieces from Mr. Livingston and Mr. Hoffman

Livingston: Health insurance exchange was the right move

I’m a Barry Goldwater/Ronald Reagan Republican who believes in limited government and the free marketplace. I am about to retire from a long and satisfying career as a physician and surgeon. I wish my generation of physicians had been able to pass on to the next generation of physicians a practice model that incorporated a greater respect for the doctor/patient relationship.

The day when physicians worked for their patients and not for a hospital network or insurance company is long over. The intrusion of government regulation has been a further intrusion of that relationship. The practice of medicine and surgery is a service business and health care systems that are designed based on a manufacturing model never work.

If ever there was an example of how top down command economies create dissociations of supply and demand just look at the single payer systems of Great Britain and Canada where 30-35 percent of health care is transacted in the private sector and where in each country there is a thriving health care insurance market. Look at the waiting lines in those two countries to see a primary care doctor or even longer to see a specialist. For that matter, look at the waiting lists in our VA hospitals, the inability of our military Tri-Care patients to find a specialist in the civilian sector or even receive care today at a military hospital. How many Boise physicians employed by either of the two hospital systems take new Medicaid patients?

However, when Gov. Butch Otter asked, I agreed to serve on the Idaho Health Insurance Exchange board of directors. And, as a member of the board, I’ve spent the past few months talking with Idahoans about why Idaho needs to steady the course and continue working to build and operate Your Health Idaho, which is our state-run health insurance exchange marketplace.

Believe me, I’ve taken some heat as I’ve talked with folks. I’ve been called a “turncoat conservative” and a lot of other names not suitable for print.

Still, I remain a supporter of an Idaho-based health insurance exchange because it is the one way we as Idahoans can be assured that we can control our own destinies, no matter what happens in Washington, D.C., concerning health care in the future.

As it stands today, Idaho has little choice. We can operate our own health insurance exchange. Or we can subject our citizens to an exchange run by the federal government. As we are all well aware, the federal government’s solution is not just clumsy, it isn’t functional.

Because Idaho got a late start in establishing our own state-run exchange, we must work with the federal platform for now—as shaky as it is. Meanwhile, we are building an Idaho health exchange platform that is controlled 100 percent by Idahoans and comes with a 100 percent guarantee that Idahoans’ private health and financial information will stay secure.

There’s no question that public-private exchange Idaho has today is still far preferable to a federal default exchange, which our state would have if the Legislature decided to repeal the 2013 health exchange law.

Idaho’s health insurance exchange protects Idahoans’ interests in a number of ways including:

- A lower user fee, .5 percent versus 3.5 percent on the federal exchange.
- Idaho vendors do the work and can be held immediately accountable if the technology fails to perform.
- A state-run exchange protects Idaho’s insurance brokers and agents and minimizes the use of “navigators.”
- The plans are vetted and regulated by our own state Department of Insurance.

We don’t know what the next five years will bring for health care and health insurance policy. Personally, I support Gov. Otter’s call for the federal government to grant Idaho at least a one-year delay in imposing the individual mandate for compliance with health insurance coverage requirements in the Affordable Care Act. Idahoans should be allowed to keep their existing plans for at least another year or until Idaho’s own health insurance exchange is operating on its own and without the need to piggyback on federal technology.

Ultimately, I’d prefer to see Idaho have a privately operated health insurance exchange that makes even more insurance products available. In the short term, however, and given all of the uncertainty ahead with the federal government, Idaho is in a far better position to continue with its own independent, state-run health insurance exchange.

Hoffman: Health insurance exchange won’t do what it set out to do

I’m quite fond of Dr. John Livingston. He’s extraordinarily bright, perhaps one of the smartest people I know, and when he says he supports the state insurance exchange, I’m certain he’s sincere in his belief he can help Idaho reach an outcome that would spare Idaho the full brunt of Obamacare. He thinks he can mitigate the coming disaster.

But I disagree with him. I think he’s wrong, and it is just a matter of time before that’s borne out. Like many who have come before him, John is under the belief that if just the right people are at the helm, they’ll be able to use government for a greater good. That almost never happens.

Let me just take a moment to respond to each of the reasons he believes the insurance exchange is good public policy.

- John says the state will use a lower fee than the federal insurance exchange. Interesting, if true. Already the exchange is faced with a serious funding problem. Not enough people are signing up for the exchange, therefore the fee the state exchange intended to charge is probably not sustainable. What’s more, the state exchange estimates that it will take 5,000 enrollees per month to keep the fee at the lower level. How many does the state have enrolled so far? We’re told it is less than 100.

- John says Idaho vendors can do the work on the insurance exchange, and that it is a plus because they’ll be held accountable. Of course, a prominent component of the insurance exchange is the transmittal of sensitive data to federal data hubs. No Idaho contractor will be able to have any kind of control over that. And short of that, the exchange requirements are so tightly controlled by the federal government that, in the end, the exchange and its contractors need only say that the federal government made them do it.

- John repeats an often-stated claim that under a state exchange, Idaho will be able to control who is contracted or hired to be “navigators.” This is true, but it minimizes another alternative Idaho always had at its disposal. The federal government has always acknowledged that the state can regulate occupations, including navigators. While I’m not a fan of occupational licensure, a government-created occupation, in this case, “navigators,” is a worthwhile exception. The state could have easily regulated this occupation as it does plenty of others, such as barbers, cosmologists, dentists and veterinarians. And those regulations could have applied to navigators serving the federal exchange, too. To be sure, we didn’t need to implement Obamacare to get control over navigators.

- Finally, John notes that insurance exchange plans are vetted and controlled by the state Department of Insurance. Again, this was always going to be the case even under a federal exchange. Insurance plans still had to comply with state minimum requirements in order to be offered in Idaho. But it’s not the state minimum requirements that are the problem right now. It’s the federal minimum requirements. And for as many as 100,000 Idahoans and millions more Americans, they’re losing the health plan they like because of Obamacare, and whether a state exchange exists or not, and whether state regulators are part of the discussion or not.

I hate the expression “time will tell,” but indeed, time really will tell which one of us is right, me or my friend John Livingston. The results so far favor my position.

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