Rep. Rusche: Not Putting Money Back Into Government Services Could Be “Penny-Wise and Pound-Foolish”

The Idaho Legislature convenes January 9th.  In advance of the session, we interviewed several legislative leaders and asked them about Idaho’s economy and what the state could be doing to boost growth and job creation.

Idaho Legislature / State of Idaho

Minority Leader Rep. John Rusche (D-Lewiston) was elected to the Idaho House of Representatives in 2004.  A retired physician and former health insurance executive, he served as Senior Vice President and Chief Medical Officer for Regence BlueShield of Idaho and Regence BlueCross BlueShield of Utah.

Q: What are your priorities for the upcoming session?

A: Personally, there’s a lot of issues involving health care, everything from the catastrophic healthcare fund, which I’m on the board of, to Medicaid and funding for various health care services that we’ve cut over the last few years.  Then, of course, the big one is the health insurance exchange and cooperation with the Affordable Care Act.  I think that’s going to occupy a fair amount of my time.

Q: Let’s start with the catastrophic health care fund.  Currently, it’s overstressed and underfunded.

A: The CAT fund is a very strange creation.  It’s really just a financial assistance fund for health care expenses, and to qualify for that financial assistance you have to be indigent, as defined by state law and the county commissioners, and have a health care expense.  So, the services are already received by the time someone qualifies for the catastrophic health care fund.  It used to be that it was to cover if somebody had an auto accident, or something, in the county, so that the small counties that had financial responsibility would not be hurt.  It was a reinsurance mechanism for those expenses.

Well, as the cost of health care increases and we get more people who are uninsured, the call on that fund has increased.  Now, we’re seeing patients that have chronic diseases – cancer, for example, or heart disease, or some chronic mental health illnesses – who may not qualify for Medicaid or disability, but don’t have money to pay for the care they need.  When you include both the county expenses and the state expenses, last year it was about $78 million.

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Q: What can the legislature do about that?

A:  My belief is that the need for that program goes away significantly in 2014 with the expansion of Medicaid and the premium insurance available through the Affordable Care Act.  I think we just have to hold on and see it through for the next two years and then we take that money and use it to fund the state part of the Medicaid expansion.

Q: I expect you’re not in the majority in thinking that way.

A: I would have to say that much of the opposition to anything related to health reform is political and not well-thought-out policy.  If we don’t have any alternative and we still have a requirement to cover the health expenses of the indigent, I don’t see any way that isn’t going to continue to increase.  There are detriments to the Affordable Care Act, but one of the main values is the extension of coverage.

Last year we had three bills attempting to nullify – in Idaho – the Affordable Care Act. One passed both the House and Senate and was vetoed by the Governor.  I think the bigger discussion will be: do we cooperate and develop our own health insurance exchange, or do we hold our breath and just say no, hoping it all goes away?  If it doesn’t, citizens in Idaho participate in a federal exchange.

Q: You’re saying it will be a debate between people who say, “Let’s try to design a program for Idaho,” and people who say, “This is going to get overturned anyway.  Let’s not even bother with it.”

A: Yes, except usually the argument is, “It’ll make the whole plan go away if we just hold our breath and say no.”

Q: And what do you think of that?

A: I think there would be some real problems.  One of the things that bothers me most is, right now, for our small group and individual insurance markets, we have two carriers that have most of the business, Regence BlueShield of Idaho and Blue Cross of Idaho.  If we did not have a state exchange, their ability to participate in a national exchange that serves 15 or 18 states would be nil.  Maybe they would end up being acquired by some other national company, but when you get to talking about most of the national companies, they are big, they’re for-profit.  The Idaho marketplace would not be their primary focus.  Whether you’re talking about customer service or responsiveness to individual community needs, we would not be well served.

Q: What are the other things that you think are going to command a lot of attention in the session at large?

A: The budget – as I see it there will be angst and discussion, but because the revenues are increasing, rather than decreasing, I don’t think it will be quite as anxiety-provoking, or quite as much a hassle as in years past.

I think some of the biggest issues will be – how much goes where?  How much goes into education?  How much goes into reserve?  Because we have virtually nothing left in reserve.  And how much goes to replace those services of government that have been cut back so much over the last three to four years?

Q: You’re thinking of Medicaid, I expect.  What other programs are you thinking of?

A: Well, I’m thinking particularly of substance abuse and mental health services that are causing a real burden on local governments now – sheriffs, county courts.  It will cost later on, either for incarceration or hospitalization, when we could have used community mental health or substance abuse services.

Q: Are you basing that on anecdotal information?

A: It’s based on anecdotal information and reports from agencies, and also from the regional mental health board.  I attended a meeting where they presented a survey of law enforcement, prosecutors, community providers, hospitals and Health and Welfare workers on their perceptions of what is going on, and they all are very consistent in the fact that cutbacks have resulted in lowered amounts of community mental health services, and that has backed those patients into the jails, the courts, and into community hospitalization.

Q: Going back to the larger issue of government services that you think have been cut too much – aside from mental health services, are there other key areas you have in mind?

A: There are.  For example, corrections.  There are high rates of turnover.  For a new corrections officer, it takes training before they can go to work, and if you have high levels of turnover, all you’re doing is spending your salary on trainees rather than on workers.

I also think we’re seriously behind on higher education.  The schools have seen an increase in students because there are no jobs for them, but the cost is getting prohibitive.  I’m really looking forward to the results of the Office of Performance Evaluations study on barriers to college or post-secondary education because I think it’s going to show that costs are seriously impacting the ability of people to continue.

Q:  I’ve talked to legislators who say the state can’t start reinstating funding for programs and services, because revenue has recently not met projections.  How do you respond?

A: I was of the opinion, last year, that we seriously underestimated what was going to happen with revenue, and I think that’s borne out.  At the end of the year, you have what’s left in your bank account, and that’s one-time money.  What should you do with that?  Well, I think there’s deferred maintenance that you could fund.  There’s money you could put back into reserve accounts.  The other is looking forward to 2013, if your revenues are already, say, 5.5 percent above what they were the year previously, that allows opportunities to do some changes in the budget.  And then there’s additional revenue growth that can be expected.

I would submit that caution is costing us by requiring us to pay more for incarceration and in-patient services than we would have had to if we had adequately funded other services.  I think the discussion will be trying to point out how we’re, in some situations, being penny-wise and pound-foolish.  I think that a wise look at the budget, a rational look at the expected revenue increase, would allow us to put some money into those services that will save us two or three years down the road.

Q: How about job creation.  What is your thinking, at this stage?

A: I think the legislature can assist the Department of Commerce.  They’ve gotten a good axe to their resources, as well, over the last couple of years.  I’m encouraged by the energy of the new director.  I think that there are some models around us in other states, including Utah, where they have set up a revolving loan fund for development of business where they have trouble getting commercial loans.  There are opportunities, I think, to participate in providing matching funds for federal grants for business development.  And one of the things I’ve been pushing for is improving our telecommunications and broadband infrastructure, particularly once you get outside the big city.  We need to have good broadband service for our small businesses, particularly.  I think we should be concentrating on improving Idaho’s image as not being good for telecommunications services.

What does it take to make business work?  What we can do is develop the infrastructure – roads, bridges, telecommunications.  An educated workforce.  We can help the businesses find customers through our Department of Commerce, and keep the tax policies stable so people can build a five- to seven-year business plan.

Q: Are these ideas that you think will actually be discussed in the session?

A: I think they’re pretty much big ideas, as opposed to being bills.  We’ve had a number of proposals come from our side of the aisle that have met closed doors.  I think it’s clear that this legislature is much more interested in showing how much they hate taxes and fees and how much they hate the federal government. So I’m not optimistic that it will reach floor debate.  But you ask what we should do for job development – well, that’s what I think we should do.

This interview has been edited and shortened.