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Weighing costs, options, timing on health insurance exchange…

Consulting firm KPMG has offered some estimates of the costs for a state-based health insurance exchange: $77 million to set it up, and $10 million a year for operations. A partnership or “hybrid” exchange, in which the federal government would handle some aspects and the state others, would have a lower startup cost of about $15.5 million, and operating costs of about $1.7 million a year. Costs for the federally run option, as far as Idaho, couldn't be estimated. “There are grant funds available under all these scenarios,” said Sandy McBride of KPMG. Nevada, for example, received a $75 million federal grant for start-up of its exchange; Washington has received $152 million.

Gov. Butch Otter's health insurance exchange working group is meeting today in the Capitol Auditorium and will meet again in its final meeting on Oct. 24; you can see the agenda here and listen live here (a lunch break is planned from noon to 1 MT). Otter will have to declare by Nov. 16 whether Idaho will set up its own state-based exchange; default to a federally run exchange; or go with a partnership between the two. States do have the option to change their choice on that same date each year thereafter, presenting a fourth option: Start with a partnership, and transition toward a state-run exchange over time; a state-run exchange would allow Idaho to continue to control the regulation of its health insurance market.

Rep. John Rusche, D-Lewiston, said of the consultant's report today, “I think that they're saying what some of us have been saying for a while: That by dawdling, we've taken options off the table.” He said, “I'm not surprised - I'm disappointed.” But he noted that not all the information is in yet as far as whether Idaho could pull together some form of state-run exchange. “There are people that are still hopeful,” he said. Click below for a full report from AP reporter John Miller.


Expert: Idaho has no time for state exchange
By JOHN MILLER, Associated Press

BOISE, Idaho (AP) — Idaho likely has run out of time to establish a state-run insurance exchange that's required by President Barack Obama's health care overhaul, meaning working with the federal government on an alternative is virtually unavoidable.

That's according to a consultant advising a 13-member panel organized by Gov. C.L. “Butch” Otter to gather information on what Idaho should do.

At this point, it's too complicated and risky to launch a state-run exchange, like neighboring states Washington and Oregon plan, said Robert Mitchell, a Denver-based consultant with KPMG LLC hired to help the state make its choice. Those states decided long ago to move ahead with their own online marketplaces for individuals and small businesses to buy insurance by 2014.

What likely remains for Idaho, Mitchell told Otter's Health Insurance Exchange working group on Tuesday, is to choose between a hybrid, state-federal exchange combination, like states like Arkansas have opted for — or cede control of an insurance exchange to federal officials, as Texas and Louisiana are doing.

“There's a whole bunch of deadlines that are looming,” Mitchell said. “No matter what you choose, if you go federal, if you go hybrid, you're still going to be interacting with the federal government.”

KPMG estimates that only seven or eight states will initially get their own exchanges, while the rest will be working in some fashion with the federal government.

In conservative Idaho, members of the Republican-dominated Legislature have been among the nation's most vocal opponents of Obama's Patient Protection and Affordable Care Act.

GOP lawmakers including House Speaker Lawerence Denney, R-Midvale, argue against doing anything. They'd been counting on a favorable U.S. Supreme Court decision, which didn't materialize.

They're now hoping GOP presidential candidate Mitt Romney wins on Nov. 6, then follows through on promises to block the president's reforms.

Meanwhile, insurers like Blue Cross of Idaho have engaged a squadron of lobbyists to argue that Idaho should establish its own exchange offering insurance plans crafted by state leaders, rather than simply relying on the courts or presidential politics to intervene.

The insurers are wary of federal regulation and worry an exchange run by U.S. Department of Health and Human Services officials in the nation's capital on behalf of multiple states, will result in coverage plans ill-suited to meet Idaho residents' specific needs.

“This is the after-effect of dawdling for a year and a half,” said House Minority Leader John Rusche, D-Lewiston and a former insurance executive who backs a state-exchange, on Tuesday.

Rusche thinks insurance policies offered by a federal exchange could cost Idaho residents more than those offered on a state-run exchange.

After the 2012 Idaho Legislature adjourned without choosing an option, Otter organized the working group earlier this summer to advise him on the best path forward.

Despite numerous meetings, time is running out.

States have until Nov. 16 to decide if they'll submit a blueprint to the federal Centers for Medicare and Medicaid Services to create their own health insurance marketplace.

But leaders of Otter's panel said Tuesday they plan to meet again on Oct. 24 because they haven't finished gathering information or drafting their report to Otter.

“Time is our enemy, in this whole thing,” said Idaho Department of Insurance director Bill Deal.

A separate working group, also appointed by Otter, has been investigating whether Idaho should expand its federal-state-financed Medicaid program to cover more low-income people, another feature of Obama's reforms meant to boost insurance coverage for Americans.

Its next meeting is on Oct. 23.


Copyright 2012 The Associated Press.


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Betsy Z. Russell covers Idaho news from The Spokesman-Review's bureau in Boise.

Named best state-based political blog in Idaho for 2013 by The Fix

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