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Lawmaker wants to explore using contractors to build exchange, but departments pan idea

Lawmaker wants to explore using contractors to build exchange, but departments pan idea

Dustin Hurst
January 21, 2012
Dustin Hurst
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January 21, 2012

Legislators have yet to decide if they want to build a state-based health insurance exchange, but at least one lawmaker wants to explore the options of how best to accomplish that task.

Rep. Fred Wood, R-Burley, a backer of exchange development, told IdahoReporter.com that he wants the state’s two departments working on the idea to explore using private contractors to build the program.

But the head of one of the departments working on it says Wood's idea likely isn't feasible.

Dick Armstrong, head of the Idaho Department of Health and Welfare, told members of the House Health and Welfare Committee that the availability of companies for exchange creation may be limited. “There are only a few companies in this nation capable of doing this,” Armstrong warned.

Though some companies can do it, the director said most are already being utilized by the federal government or other states in the push to build other exchanges before the Jan. 1, 2014, deadline. “These firms are all engaged,” Armstrong said, adding that he’s lost people  from within his department who took jobs doing similar work with exchange contractors.

And even if the state could find a way to get contractors to do the work – if eventually approved – Armstrong says hiring them would be cost-prohibitive. “Prices have gone through the roof,” Armstrong said, citing demand from nearly every state to have contractors build exchanges.

Still, Wood is confident contractors will be eyed in the run-up to the exchange vote. “I’m sure we will, but I don’t know yet,” Wood said about exploring contractors to build the program. “We’ll just have to wait and see.”

The Idaho Department of Insurance, the flagship agency in exchange development, isn’t hot on the idea of using contractors, either. In an informational document about the program, DOI officials wrote that, “Health and Welfare has the technical expertise and knowledge” to aid exchange development.

Because DOI and DHW need “tight integration” of their systems in an exchange, insurance officials believe the state is best fit to do the job. “Outsourcing development of an exchange would be far more costly than utilizing DHW’s expertise and their availability of obtaining technical resources.”

Officials have until Jan. 1, 2013, to build a federally-certified exchange. The federal government handed the state $20 million to do the job, though lawmakers are undecided if they will authorize use of the funds.

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