BOISE – Idaho stands to lose big if it doesn’t apply for a $40 million federal grant by Sept. 30 to set up a state-run health insurance exchange, Gov. Butch Otter and two top state agency officials told state lawmakers Monday.
If the state doesn’t get going with an exchange, the federal government will step in and do it, Otter warned. Idaho is “at a crossroads,” the governor told members of the Legislature’s joint health care task force.
If Idaho doesn’t set up its own exchange, as many as 2,500 Idaho insurance agents who are licensed only for health and life policies could go out of business, according to Idaho Department of Insurance Director Bill Deal. “It’s going to be very disruptive to the Idaho marketplace,” Deal told the lawmakers.
But just as concerning, he said, is that Idaho would lose the ability to regulate the state’s health insurance industry. “Without question, the federal government’s going to dictate the policies that are followed here in Idaho with health insurance,” he said.
Otter doesn’t need the lawmakers’ OK to apply for the grant, but after hearing from him Monday, lawmakers from both parties said they support applying for the grant – even some who are leery of any participation in national health care reform.
“We can go forward and establish our own exchange, and I think we should,” said Rep. Janice McGeachin, R-Idaho Falls, the House Health and Welfare Committee chairwoman.
House Minority Leader John Rusche, D-Lewiston, said, “To me it’s a no-brainer.”
Otter hasn’t formally approved the grant application yet, but he hinted he’s likely to within the coming weeks.
Otter remains a firm opponent of national health care reform legislation, and the state is continuing to press its lawsuit seeking to overturn it. But Otter said the idea of health insurance exchanges has been around since long before the legislation, and Idaho has been looking into it since 2007. “That idea, I believe, was co-opted by Obamacare,” he told lawmakers.
Idaho lawmakers this year passed legislation aimed at allowing the state to opt out of complying with portions of national health care reform legislation, after first considering several measures aimed at attempting to “nullify” the federal law. Otter imposed an executive order banning Idaho from accepting any federal money under the federal health care reform law unless he personally approves a waiver.
So far, he said, he’s approved 10 of the 13 waivers state agencies have requested, mostly for grant programs unrelated to health care reform whose funding now falls under the bill. He needs to issue another waiver to approve the grant application before the Sept. 30 deadline.
McGeachin said Idaho could later decide not to spend the federal money and fund an exchange with state funds; she said she wonders if it couldn’t be done for less.
“Our country’s going broke,” McGeachin said. “We just need to be sure no matter where the money’s coming from, that we’re spending it appropriately.”
Otter assured the legislators that Idaho could apply for and receive the grant, and then – as Kansas and Oklahoma already have done – return all or part of it without penalty.
Deal said Idaho is one of 12 states whose Legislature hasn’t taken any action yet to set up an exchange; states that have enacted such legislation include Washington, Oregon, Nevada and Utah.
Idaho Health and Welfare Director Dick Armstrong said 31 percent of Idahoans ages 18 to 34 had no health insurance last year, a figure he called “strikingly high.” Overall, 17 percent of Idahoans lack insurance, but rising costs have pushed the healthiest population – the 18- to 34-year-olds – to drop it. An exchange would help, Armstrong said. “We all know the current system is unsustainable.”
Jim Wordelman, state director of the Idaho AARP, praised Otter’s stand. “The creation of the exchange would allow individuals, families and small businesses to find affordable health care by giving them the same advantages large companies have when they negotiate group rates,” Wordelman said.