BOISE - It may already be too late for Idaho to set up a state-run health insurance exchange in time to meet federal deadlines, state Insurance Director Bill Deal told lawmakers Monday.
“We’ve not been given the direction to move forward,” Deal told a joint task force of the Idaho Legislature. “So now our timelines are getting to the point that, is it realistic that we could put together a state-based exchange at this particular time?”
A year ago, Gov. Butch Otter pushed for a state-run exchange to keep the state in charge of its insurance market as health care reforms take effect, and his administration received a $20.4 million federal grant to start planning for the exchange. But state lawmakers turned away the money, hoping instead that the U.S. Supreme Court would overturn the health care reform law; instead, it upheld it.
Now, Otter has convened two working groups to study options for a health insurance exchange and whether Idaho should opt into a federally funded Medicaid expansion; the groups start meeting in the next week and a half and will give Otter their recommendations by fall.
In Washington, by contrast, the state is hard at work on its own state-run exchange, and in May received a $128 million federal grant to start it up.
Deal told the Idaho Legislature’s Health Care Task Force on Monday that he’s already decided to pass on the next federal grant opportunity, which has a mid-August deadline. Idaho’s next chance at applying for federal funds to start an exchange would be in November - the same month in which all states have to have decided on their exchange plans.
He suggested the state might want to consider a “partnership” exchange - a third option, beyond a state-run or fully federally-run exchange, in which the state and federal governments would share duties. He noted that the national law lets states decide each November if they want to change course on their exchanges.
“So many states are considering this partnership thing as a way to get started, a way to fund an exchange, and then down the road, 2015, 2016, they can put together an exchange, move in a different direction, go with a state-based operation,” Deal said.
Some legislative leaders were unconvinced. “A lot of the rules applying to this new law are being written as we speak - there’s so much gray area,” said Rep. Gary Collins, R-Nampa, task force co-chairman. Collins said he thought the feds would likely ease their deadlines.
Sen. Dean Cameron, R-Rupert, the Senate co-chairman of the task force, said, “I don’t think it’s too late. … I think they very well could back the deadline off. I think it’s all still up in the air.”
Sen. John Goedde, R-Coeur d’Alene, who like Cameron and Collins is an insurance broker, said, “In the traditional manner that you’d expect a state exchange to be implemented, I don’t think there’s enough time. But there may be an off-the-shelf opportunity.”
Goedde said he’s looking into reports that other states have found vendors from whom they can “rent” an exchange, though Deal said he was unaware of that. Goedde also noted that Alaska commissioned a study that recommended that state transition to a state-run exchange several years down the line.
Cameron said if Idaho were to look at a partnership, it should look at partnering with another state, like Utah, that’s already started work on an exchange, rather than with the federal government.
“Because the Legislature failed to act, we put ourselves in a little bit of a bind - we made our job more difficult,” Cameron said. “But it doesn’t mean that we can’t still do our job.”
Deal said going with a federally operated exchange - the default if Idaho does nothing - would mean giving up a substantial amount of the state’s authority to regulate its insurance market.
Federal officials are currently anticipating they’ll have to run health insurance exchanges for lots of states - “as high as 30,” Joy Wilson of the National Conference of State Legislatures told the task force by phone on Monday from Washington, D.C. “So if you have particular issues in your state, whether it’s geography or special populations or just something that is unique about your state, the likelihood that that will get addressed is diminished if it’s a federally facilitated exchange, because they just can’t do customization.”
She added, “It kind of depends on how comfortable you are with HHS (U.S. Health and Human Services) having that big a role in your insurance market. I think it really comes down to if you can find solace in that or not.”
That drew a murmur from the crowd of about 75 onlookers at the task force meeting, which included many lobbyists and representatives of various parts of the health care industry.
Sen. Steve Vick, R-Dalton Gardens, said he’s not convinced there could be much state autonomy in a state-run insurance exchange anyway, because it would have to comply with federal rules. Plus, he said he likes the idea of forcing the federal government to go to work on lots of state exchanges, with the idea that it will slow them down. “That gives us more time to repeal the whole thing,” he said.
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