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THURSDAY, AUG. 25, 2011

Editorial: Otter wise to lead on health care exchanges

Score one for logical over ideological.

Though he’s no fan of national health care reform, Idaho Gov. Butch Otter is taking a pragmatic stance in telling legislators that the state should take $40 million in federal money to establish the health care exchanges called for in the Affordable Care Act, aka “Obamacare.”

The state is one of a dozen holdouts that have yet to take any action to meet the Sept. 30 deadline for filing a federal application.

If Idaho’s leaders fail to establish exchanges, the feds will do it for them by 2014, when much of the national reform law kicks in. And if that happens, the state would not only lose control of the exchanges but as many as 2,500 Idaho insurance agents could be driven out of business, according to the Idaho Department of Insurance.

Fortunately, lawmakers who initially responded to health care reform with bills of defiance are softening their positions and seeing the wisdom of embracing the parts of reform that aren’t so objectionable.

Health care exchanges were not invented by President Obama or congressional Democrats, and they have long been touted as a possible solution for small businesses and people in the expensive individual market. For one thing, exchanges allow business owners to work together to negotiate lower prices. They also increase competition among insurers, which should help deliver better bargains.

By applying for the federal funds, Idaho can fashion the kind of exchange it wants without having to come up with the money to finance it. If national reform is repealed or significantly altered, the state loses no money of its own.

The more hidebound lawmakers who are banking on the long shot of nullification laws offer no realistic health care solutions in return. Nullification theory suggests that states can choose which federal laws they will obey. This was the Idaho Legislature’s “answer” to health care reform, but fortunately Otter vetoed that bill and gave himself – and the state – more wiggle room.

As a result, the state can pursue the more palatable parts of health care reform. In explaining his April veto, Otter noted the prospect of setting up health care exchanges, so it should be no surprise that he is pushing for them now.

Otter’s savvy moves on this issue show the difference between elected representatives who are merely obstructionist and those who have to govern.

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