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The Road To Idaho's Health Insurance Exchange


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Idaho’s state-run health insurance exchange is expected to begin enrollment by Oct. 1, 2013 and fully functional by Jan. 1, 2014. The exchange is an online marketplace where Idahoans will be able to shop for and purchase health insurance. The Idaho Legislature approved plans to build the exchange in March 2013, but two years of intense debate preceded the vote.

After the U.S. Supreme Court upheld the Obama Administration’s federal health care overhaul in 2012, two key decisions rested with states. One, should states expand Medicaid to include more people? Two, should states create their own health insurance exchanges?

Gov. C.L. “Butch” Otter chose not to make a snap judgement, instead, he created a work group to study whether Idaho should create it’s own health insurance exchange, let the federal government create one for the state, or some combination of the two options.

Otter’s 14-member panel decided in October 2012 that Idaho should move forward with creating it’s own exchange. The governor followed suit, and Gov. Otter issued a statement on Dec. 11, 2012 that Idaho should create a state-based exchange.

Two Years Of Debate

The health insurance exchange debate has been ongoing ever since it became clear an exchange would be part of the federal health care reform package which was signed into law in 2010.

Because Idaho didn’t have the framework set up for a health insurance exchange, it was expected to be one of the biggest debates of the 2012 legislative session

The Associated Press held a special discussion of the issue during its January 2012 legislative preview. In a series of interviews that StateImpact conducted in December, legislator after legislator predicted it would be a defining issue of the months ahead.

Instead, it was more or less dead on arrival. Not even a plan developed by Sen. Dean Cameron (R-Rupert) and Rep. Fred Wood (R-Burley) for a stripped-down, state-run exchange could muster sufficient support.

Health insurance exchanges are a primary component of the Affordable Care Act. By their most basic description, exchanges are organizations — essentially online marketplaces — intended to make health insurance options more clear and, thereby, more competitive.

The underlying logic is this: individuals and small businesses don’t have perfect information or a great deal of bargaining power with insurers.  A health insurance exchange lays out the private and public health insurance options, explaining plans in terms of benefits and costs.

Under the Affordable Care Act, states can create their own exchanges or wait for the federal government to do it for them.

Rep. Wood says it was ideological opposition to the health care law that did in the prospects for a state-run exchange.  “I think there was a certain number of people that simply didn’t want anything to do with an exchange,” he said.  “And they were in a position that they could affect that outcome. In other words: no exchange.”

Wood, a retired physician and former director of the Cassia Regional Medical Center, believes state lawmakers are rolling the dice, hoping the federal health care law will be overturned.  “They’re betting that the Supreme Court will strike down the entire law,” he said. “And if we bet the wrong way, it could be very costly for the state.”

Costly because states creating their own exchanges will have some discretion to set the essential benefits that must be provided by insurers. But states falling under the federal plan likely won’t have that same flexibility. The Idaho Department of Insurance has predicted Idaho employers could expect to pay millions more in health care costs under a federal exchange.

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