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State exchange: Governor, Legislature obligated to own it … including the latest bad news

State exchange: Governor, Legislature obligated to own it … including the latest bad news

Wayne Hoffman
October 14, 2013
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October 14, 2013

One week after the less-than stellar launch of Obamacare and its insurance exchanges, we are learning that a key selling point behind the Idaho implementation of the health care law may not come to fruition. Well, to recall …

We were all told in January that the state insurance exchange would assess a 1.5 percent surcharge on insurance premiums. Supporters of the state exchange said Idaho ownership of the exchange was better, in large part because Idaho could beat the federal government's proposed 3.5 percent surcharge on premiums.

But the Associated Press reported Thursday that the state insurance exchange is now reconsidering its figures, saying its 1.5 percent rate may not be sustainable. According to emails obtained by the news agency, the exchange's finance director says the rate will probably need to go up to 2.6 percent.

And, get this: Exchange board members were supposed to hear about the issue in September, but a presentation on the subject was cancelled. So was a PR campaign intended to blunt the shock of the exchange's broken promise.

Exchange executive director Amy Dowd told the AP that a projection of a higher rate was too speculative for public consumption.

"The reason we weren't comfortable publishing 2.6 percent is, we have no clue what the number is going to be," Dowd told the AP. "We've done some modeling, we've got some data, but as far as our comfort level, putting a number out today is not a wise decision."

But certainly the horrible national rollout of the exchanges will impact the Idaho state exchange's ability to be self-sustaining as required by federal law. Millions of people logged on, we are told, but the federal government isn't saying how many people actually managed to sign up.

The government's metric for success is the number of web hits. Any marketplace that uses web hits as a measure of success would go out of business. Think of the store CEO who says, "I can't tell you how many sales we had, but we had 60,000 web hits today."

The point is, the impact for each individual health insurance exchange is potentially dire. The fewer who sign up, the higher the per patient per month costs will be. Someone has to pay the price for the exchange's big salaries.

The Idaho Legislature won't be able to stop the fee increases, either, because the Legislature walked away from any meaningful oversight of the exchange, including what fees it charges. Fees will go up or down without approval by your elected officials.

I suspect the exchange's problems are just beginning. The so-called state exchange is really a creature of the federal government. Go to the state exchange website to sign up, and you'll be redirected to the federal government's monstrosity, the one that is notorious now for an error message. So notorious that the Daily Show's Jon Stewart challenged Health and Human Services Secretary Kathy Sebelius to sign up for Obamacare or download a movie from the Internet and see which happens first.

I've said it before, and I'll say it again: The lawmakers who voted for the exchange and the governor who signed it into law have to own it. They wanted to own the policy that resulted in lower insurance exchange fees than the feds.

Now, they need to own it when the fees end up being higher than projected and the sign-up process makes an IRS audit look good.

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