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Otter-appointed working group discusses options for health insurance exchange

Otter-appointed working group discusses options for health insurance exchange

Idaho Freedom Foundation staff
August 3, 2012

Idaho is just beginning the information-gathering process as state officials determine what their response will be to the provisions of the Patient Protection and Affordable Care Act (PPACA), commonly known as Obamacare. A working group of more than a dozen legislators, bureaucrats, insurance representatives and government watchdogs met for the first time Thursday for a discussion of the array of possibilities and potential costs for action—or inaction. Thursday's meeting, led by Idaho Department of Insurance Director Bill Deal, follows Monday's legislative task force meeting, which covered some of the same ground.

Many governors, including Idaho's Gov. Butch Otter, have been vocal about their opposition to the law, which was recently upheld by a Supreme Court ruling as constitutional. For some, that opposition has taken the form of public refusals to implement health insurance exchanges. Otter, on the other hand, during the legislative session earlier this year was a strong supporter of a plan to create an Idaho-managed exchange. Idaho now faces a decision about whether to implement a state-based exchange in order to maintain some degree of control over its provisions, partner with the federal government to manage some of the exchange details, or do nothing and wait for the federal government to intervene and set up the exchange itself, as the PPACA specifies would happen at some point after a Nov. 16 deadline to submit plans for a state exchange.

A common refrain throughout Thursday's meeting was the fear that inaction would cede too much control to the federal Department of Health and Human Services (HHS), which might not represent residents' interests as well as an exchange conceived by Idahoans. If the federal government sets up its own exchange, Deal said, "the Department of Insurance loses regulatory authority over the industry." Without clear guidelines for what a federally acceptable exchange would look like, though, a state-run exchange could fail to meet those requirements and still end up under federal control. If, on the other hand, a state tailored its exchange to a detailed set of federal mandates, it would ultimately be a state exchange in name only.

House Minority Leader John Rusche, D-Lewiston, who has also worked as a physician and an insurance executive, worries that a federal exchange would ultimately be much more expensive, because Idaho is currently one of the lowest-cost states for insurance, as he elaborated in a previous interview with IdahoReporter.com.

For some opponents of the law, including working group member Wayne Hoffman, who is also executive director of the Idaho Freedom Foundation, it's important for Idaho to reject a state exchange so that employers and state officials maintain standing for a court challenge to Obamacare and to an Internal Revenue Service rule that levies a tax on employers that would help fund the exchange insurance tax credits called for in the law.

Rep. Lynn Luker, R-Boise, initiated discussion of the potential costs of an exchange, but even rough estimates are still unavailable for either a state or federal version. During Monday's legislative task force meeting, Deal suggested that in the absence of robust figures for Idaho, the costs faced by a state like Delaware could be a good guide for Idaho. In Thursday's working group meeting, he suggested that looking to the costs of exchanges in states like Oregon could also be instructive, but acknowledged that Idaho-specific figures present a logistical challenge. "We have minimal funds to do the research," Deal said.

Penny Schwiebert, who heads the insurance exchange project for the Idaho Department of Insurance, noted that the PPACA requires states to demonstrate "significant progress" toward implementing state-based insurance exchanges by January 2013. The legislative and gubernatorial exploratory groups that have so far been established may end up accomplishing something, but she maintains that this won't satisfy the law's requirement. "We haven't made significant progress," she said. "We're stalling."

For those who want to maintain some semblance of state control while still fulfilling the provisions of Obamacare, the thrust of the meeting was that decisions should be made sooner rather than later. For those who want to challenge the law, on the other hand, a refusal to implement an exchange is the most important action of all.

The working group has tentative plans to meet again in late August to share the results of their collective research efforts during the interim.

Note: IdahoReporter.com is published by the Idaho Freedom Foundation.

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