Bringing the Economy Home

The Ideological Tug-Of-War Continues Over Creating An Idaho Health Insurance Exchange

Idaho Public Television Screenshot

The debate among Idaho lawmakers started in earnest today over whether the state should create its own health insurance exchange.

At its heart, the debate is an ideological one: does Idaho work within the confines of the federal health care law to establish its own exchange? Or, does Idaho continue to fight the law and reject the exchange, defaulting to a marketplace run by the federal government?

The Otter administration is pushing for the first option. Even though the governor has opposed, what he and others call Obamacare in the past, he supports creating a state-based exchange so Idaho has as much control possible over the online marketplace to purchase insurance.

Gov. C.L. “Butch” Otter’s chief of staff David Hensley told lawmakers, “Do we want in on the ground floor? Or do we want to inherit what the federal government sets up for the state of Idaho?”

Hensley told the Senate Commerce and Human Resources Committee the administration estimates 278,800 Idahoans don’t have health insurance. That’s just under 20 percent of the population.

“If we can help it, we don’t want to leave those individuals and small businesses at the mercy of the federal government,” Hensley says. “Even with the restrictions of Obamacare, we know we can do a better job at this than the feds.”

The Otter administration estimates it will cost $20 million to start an Idaho-based exchange, which will be paid for through a federal grant. The ongoing, annual cost is estimated at $10 million.

Hensley told lawmakers their plan is to charge members of the exchange a “premium fee.” That could be monthly fee of $4.80, which amounts to an annual cost of $57.60. A federal exchange, says Hensley, would charge monthly fees, on average, of $13.55, or $162.60 a year.

“If we can save Idahoans money, which we believe we can by operating this in a more efficient manner, we should,” says Hensley.

The head of the group leading the opposition to a state-based health insurance exchange doesn’t dispute that Idaho would save money if it created its own marketplace. But the conservative lobby group Idaho Freedom Foundation’s executive director Wayne Hoffman says it’s not about the money.

“You’re implementing a form of phony federalism that will hurt your constituents in the long run,” says Hoffman.

Hoffman has long been an outspoken critic of the federal health care law, and has urged the state to reject all aspects of it. When it comes to the health insurance exchange, Hoffman says state control is an anomaly. He says an Idaho-based exchange won’t give the state a seat at the table with the federal government, because there is no table. “The federal government sets the rules, and you comply with it,” Hoffman says.

According to the Kaiser Family Foundation, 19 states, including Idaho, have declared intent to build a state-based exchange, while 25 have defaulted to a federal exchange and seven are planning a state-federal partnership exchange.

Sen. Todd Lakey (R-Nampa) asked Hoffman if there would be a benefit to the state creating an exchange now, seeing how it works over the next year, and then possibly transitioning to a partnership or a federal exchange if things aren’t going as planned.

That’s an option — states can switch — but Hoffman is skeptical of that route.

“But that’s also true of Medicaid, and food stamps, and all the other entitlement programs you’re administering that you wish you could get out of, but you can’t, because you have people who are determined to get that benefit or entitlement,” says Hoffman.

During the question and answer segment, the Senators repeatedly tried to pin Hoffman down on state sovereignty.

“Do we both agree on the general conservative concept, better the state than the feds on a vast majority of things?” asked Sen. Lakey. “Why should we not be acting…like sovereign states?” asked Sen. Dean Cameron (R-Rupert).

Hoffman said there is nothing about a state-based health exchange that protects state sovereignty. “Businesses already are at the mercy of the federal government.  This doesn’t shield them from anything,” he added. “You’re helping implement the thing that is hurting Idahoans.”

For more than an hour, lawmakers listened to Otter’s chief of staff David Hensley and the Freedom Foundation’s Hoffman, and asked them both a litany of questions. That left just 25 minutes for public comment. Six people were given three minutes each to speak. In the standing-room-only auditorium, that left a lot of people without time to weigh in.

On Thursday, the panel will continue its hearing on the exchange, and it’s likely the full 90 minutes will be available to hear from the public.


About StateImpact

StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.
Learn More »