After Court Rules, Idaho Has Dilemma Over Exchange

By John Miller | July 2, 2012

Incensed over “Obamacare,” Idaho lawmakers last session snubbed $20 million from the federal government earmarked for an insurance exchange and refused even to make baby steps toward establishing this online marketplace for individuals and small companies to shop for coverage.

Despite the threat of the federal government imposing its own exchange on Idaho, House Republicans instead banked on the U.S. Supreme Court dumping President Barack Obama’s health care overhaul.

After justices went the other way Thursday, however, Idaho insurance companies are now calling for renewed action on an exchange that will allow them to offer their products in a market they currently dominate, on grounds a federal alternative would hurt consumers.

Still, lawmakers say it would take lightning-quick action by Idaho, combined with a lenient federal government, to meet a looming Nov. 16 deadline to submit a plan for health insurance exchanges to the U.S. Department of Health and Human Services.

“I don’t know if there’s time to do anything,” said Rep. Fred Wood, R-Burley, a medical doctor who unsuccessfully pushed for a state exchange during the 2012 session. “I worry, and I suspect, we’re going to wind up with a federal exchange.”

That’s a scenario Blue Cross, Regence Blue Shield and PacificSource, the state’s biggest insurers, are hoping to avoid. They’ve all argued that deferring to a federal exchange could boost costs for consumers, provide insurance products ill-suited to rural Idaho and leave consumers at the mercy of an out-of-state insurance system.

Hours after Thursday’s high court ruling, Blue Cross, which insures about 500,000 Idaho residents, urged Idaho lawmakers to arms.

“In Idaho, our major focus should now be on establishing a state-based health insurance exchange,” the company said in a statement. “A state-based exchange ensures Idahoans are clearly represented when deciding how they will purchase individual insurance in the future.”

The state Department of Insurance declined comment Friday, but indicated the $20 million federal grant is no longer on the table, even if Idaho wanted it.

That narrows options for Gov. C.L. “Butch” Otter, who returned to the office Friday from an annual trail ride to be debriefed on the issue and decide a course of action.

“We’re having meetings on that today, all of those options in the aftermath of this decision are on the table and are being discussed,” said Otter’s spokesman, Jon Hanian.

One thing Otter isn’t planning on is a special session to ask lawmakers’ input, Hanian said.

A likely reason? Republican lawmakers appear to be no more favorable toward a state exchange now than they were during the 2012 Legislature. Some are simply banking on Mitt Romney to win the presidency in November to help stall Obama’s reforms.

Given the Idaho GOP’s unabated enmity for the health overhaul, an extraordinary legislative session could be a recipe for political chaos.

House Minority Leader John Rusche, D-Lewiston and a former Regence Blue Shield executive, favors a state insurance exchange.

But as a minority Idaho Democrat, he knows that the Supreme Court’s ruling has done little to change the majority GOP’s mind.

“Who is going to agree to a special session to implement `Obamacare?’ “ Rusche said. “How many Republicans are going to be willing to do that?”

One skeptic is Rep. Janice McGeachin, outgoing chairwoman of the House Health and Welfare Committee. She’s wary that Idaho insurers are demanding a state exchange to protect their business models, not consumers.

McGeachin, R-Idaho Falls, contends a proposed state-run insurance exchange like one that emerged from interim legislative meetings in late 2011 gave too much power to Idaho insurance companies and did too little to promote price-dampening competition.

“If a federal exchange would allow for more of that consumer choice, what would be wrong with that?” she said.

Idaho insurers contend McGeachin has it wrong.

It’s not a question of who gets to compete, said Karen Early, a Blue Cross spokeswoman, but one of who will craft the rules. Early contends a state-run exchange will offer plans that cost half the premiums of those plans available on a federal exchange.

She said the real question is who will be in charge of crafting the marketplace for individual insurance to be sold in the state.

About John Miller

Associated Press
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