Otter wants health insurance market state-run

December 12, 2012 - Updated: 8:15 a.m.

BOISE – Idaho will opt for a state-based health insurance exchange, Gov. Butch Otter said Tuesday, although legislators still need to weigh in on that proposal when they convene in January.

Idaho lawmakers last year opted to do nothing on an exchange, gambling unsuccessfully that the U.S. Supreme Court would overturn the national health insurance law.

“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 multistate lawsuit to try to stop it. The governor said the presidential election was at least in part a referendum on the enactment of what he called Obamacare.

“There will be a health insurance exchange in Idaho. The only question is who will build it,” Otter said.

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.”

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 decision follows the overwhelming recommendation of a working group he appointed to study the issue for months. State Sen. John Goedde, R-Coeur d’Alene, who served on the working group, said he thinks Otter did the right thing.

“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 said.

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 the Affordable Care Act. 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. The IFF’s executive director, Wayne Hoffman, issued a statement promising to fight against it in the upcoming legislative session.

State Rep. Vito Barbieri, R-Dalton Gardens, continues to oppose a state exchange. “My inclination is to resist,” he said. “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, a physician, last week was named the new chairman of the House Health and Welfare Committee, which previously had been chaired by a fervent exchange opponent.

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.

Otter’s state insurance director, Bill Deal, warned that letting the federal government operate the exchange 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.

At a glance

How they work

Health insurance exchanges, under the national health care reform law, 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.


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