Idaho late on insurance exchange

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 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 contrast, Washington is hard at work on its own state-run exchange and in May received a $128 million federal grant to start it.

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, when all states have to have decided on their exchange plans.

He suggested the state might want to consider a “partnership” exchange – a third option – 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 state Rep. Gary Collins, R-Nampa, task force co-chairman. Collins said he thought the feds would likely ease their deadlines.

State Sen. Dean Cameron, R-Rupert, co-chairman of the task force, also said he thinks the deadline could change: “I think it’s all still up in the air.”

State 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 which 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.

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. As many as 30 states may opt for federally run exchanges.

State Sen. Steve Vick, R-Dalton Gardens, 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 things down. “That gives us more time to repeal the whole thing,” he said.