December 11, 2012 in Idaho

Otter opts for state-based exchange in Idaho

By The Spokesman-Review
 

BOISE - Idaho Gov. Butch Otter announced Tuesday that he’s notifying the federal government that Idaho will opt for a state-based health insurance exchange, subject to legislative approval.

Idaho lawmakers - who last year opted to do nothing on an exchange, gambling unsuccessfully that the U.S. Supreme Court would overturn the national health insurance law - will receive exchange legislation from Otter when they convene in January.

“This is not a battle of my choosing, but no one has fought harder against the mandates and overreaching federal authority of the Affordable Care Act,” said Otter, a Republican who long has opposed the reform law, and joined a multi-state lawsuit to try to stop it. “No one has more consistently and clearly demanded that Idaho retain the authority and flexibility to chart our own path forward. There was a judicial process for challenging Obamacare, and the presidential election was at least in part a referendum on its enactment. But despite our best efforts, the law remains in place, and almost certainly will for the foreseeable future. There will be a health insurance exchange in Idaho. The only question is who will build it.”

He added, “Our options have come down to this: Do nothing and be at the federal government’s mercy in how that exchange is designed and run, or take a seat at the table and play the cards we’ve been dealt. I cannot willingly surrender a role for Idaho in determining the impact on our own citizens and businesses.”

Otter’s decision follows the overwhelming vote of a working group he appointed to study the issue for months. Sen. John Goedde, R-Coeur d’Alene, who served on the working group, said, “I think the governor did the right thing, in the face of certainly a lot of opposition.”

Goedde said, “I don’t think that we have any choice - we’re going to establish a state-based exchange, or we are going to get the federal exchange by default.”

Goedde, a longtime insurance broker, said Idaho’s health insurance premiums are among the lowest in the nation, in part because Idaho has so few state mandates on what insurance plans must offer. If the state were lumped in with other states in a federal exchange, “There’s no question in my mind … it’s going to drive the cost of insurance up.”

Some Idaho lawmakers have been outspoken in opposition to doing anything required by “Obamacare,” and ideological groups like the Idaho Freedom Foundation have been lobbying hard against a state-based exchange, even as Idaho business groups and insurers pushed for it. That group’s executive director, Wayne Hoffman, issued a statement after the governor’s announcement promising to fight against it in the upcoming legislative session.

“I’m just proud of our governor,” Goedde said. “He knows he’s going to be taking heat, but he did the right thing.”

Rep. Vito Barbieri, R-Dalton Gardens, continues to oppose a state exchange. “My inclination is to resist,” he said after the governor’s announcement. “The bottom line is if the federal government is going to control it, they should run it. … I’m absolutely convinced that my constituents do not want it.”

But the Idaho Legislature has lots of new faces this year, with record turnover in the November election. And the author of last year’s failed exchange legislation, Rep. Fred Wood, R-Burley, last week was named the new chairman of the House Health and Welfare Committee, which previously had been chaired by a fervent exchange opponent.

Barbieri said, “I’m just not inclined to believe that the Legislature should just rubber-stamp this, but there’s a lot of new people there and we’ll have to see how they go. I’m just not going to be able to go along.”

Otter remained critical of the national health care reform law, which he maintains won’t lower health care costs. “But it is an unfortunate and unwelcome reality, and it would be irresponsible of me to simply abandon the field to federal bureaucrats,” he said. “ In the face of uncertainty we must assert our independence and our commitment to self-determination while fulfilling our responsibility to the rule of law.”

Health insurance exchanges, under the national health care reform law, will provide an online marketplace where consumers can shop for the plans, rates and features they want, and also access government subsidies if they qualify for them. States have the option of setting up their own exchanges, partnering with the federal government, or doing nothing and allowing the federal government to operate their state exchanges.

Otter’s state insurance director, Bill Deal, warned that that would mean Idaho would lose the ability to regulate its health insurance market.

Otter’s working group called for a privately operated, state-based exchange, and that’s what Otter plans to propose to lawmakers in January. His press secretary, Jon Hanian, said, “We will have details about it in the State of the State,” the message the governor delivers to a joint session of the Legislature on its opening day, Jan. 7.

Said Otter, “I take some comfort in the fact that even those disagreeing with this decision strongly believe as I do in Idaho’s ability to be more responsive and do a better job than the federal government alone of ensuring our citizens can make informed choices about their health care.”

House Minority Leader John Rusche, D-Lewiston, a retired physician and former health insurance executive, said, “Idaho’s a low-cost health insurance state. And if we’re pooled with the national average, you can expect that you’d be paying the national average.”

He estimated that Idahoans pay $500 to $1,000 less in annual premiums than the nation as a whole, mainly because of few mandates and low utilization rates. Putting Idaho into a federal exchange would force Idahoans to pay national rates, he said.

“It’s the better decision,” Rusche said of Otter’s announcement. He added, “The politics of this are going to be really interesting.”

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