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Senate panel backs Otter on insurance exchange

Insurance agent Tom Shores testifies to the Senate Commerce Committee on Thursday (Betsy Russell)
Insurance agent Tom Shores testifies to the Senate Commerce Committee on Thursday (Betsy Russell)

BOISE – Idaho Gov. Butch Otter’s controversial state health insurance exchange legislation won near-unanimous support from a Senate committee Thursday after two days of hearings, a key victory for the GOP governor.

The only member of the Senate Commerce Committee to oppose the bill was Democratic Rep. Branden Durst of Boise, who said he favors the exchange, but was concerned that the bill as written didn’t provide for enough legislative oversight.

Opponents wearing swatches of bright pink tape filled the Capitol Auditorium for the hearing on Thursday, with many saying they opposed both a state exchange and a federal exchange – the alternative if the state doesn’t set up its own.

Tom Munds of Caldwell told the senators, “The simple fact that Idaho would even consider a monster like this scares me. If the people truly prefer a form of government foreign to our Constitution, then they do so at their own ignorance.”

Wayne Hoffman, head of the Idaho Freedom Foundation, a conservative lobbying group, warned, “You will be under the thumb of the federal government.”

But the senators said they couldn’t choose no exchange at all.

“I despise Obamacare, and that’s actually an understatement,” said Sen. Todd Lakey, R-Nampa. “But I have to look at … the reality of the way it stands now. I don’t believe that if we don’t do a state exchange, that the federal government will not be able to make it happen. … The reality we’re facing is either the federal government exchange, which I think is the worst option, or the state exchange.”

Lakey said Idaho can at least include “free-market principles” in its exchange, like the bill’s provision that participation is entirely voluntary.

Both North Idaho senators on the committee, Sens. John Goedde, R-Coeur d’Alene, and Dan Schmidt, D-Moscow, voted in favor of the bill, SB 1042. To become law, it still must pass the full Senate and House and receive the governor’s signature.

Schmidt, a physician, said, “This is an opportunity, and I’m sorry, we have problems with health care in this country. We have problems with health care in this state. “

Hensley, Otter’s chief of staff, told the senators that the cost to build and set up a state-based health insurance exchange like the one Otter is proposing is about $20 million, and there is a federal grant for $20 million available. Then, the estimate is that the annual operating cost would be about $10 million. “From our standpoint, that can be achieved through a per-member, per-month fee,” Hensley said, “and if you think about 177,000 people using this exchange … you can see that we could have a per-member, per-month fee of $4.80 to cover the cost of operating the exchange on an annual basis. Now, that works out to about $58 per year.”

By contrast, he said, the federal government has informed Idaho that if the state goes with a federally operated exchange, “They believe they will generate $28 million a year from a 3.5 percent premium tax, a premium fee, on the same 177,000 people who participate in the exchange, with an average premium on an annual basis of $4,650. Doing the math, that works out to a per-member, per-month fee of about $13.55.”

Said Hensley, “At the end of the day, if we can save Idahoans money, which we believe we can, by operating this in a more efficient manner, we should.”

Joe Rohner, speaking against the bill, told the senators, “From this day forth, Mr. Otter owns Obamacare, which shall now be known statewide as Ottercare.”

Sen. Dean Cameron, R-Rupert, said, “I wish I had another choice. The only choice I see is for us to follow what I think was the lead of Gov. Otter, and I think he should be commended, not criticized. He’s trying to protect our rights, he’s trying to protect our sovereignty.”