BOISE • Opposition from House conservatives has ended Gov. C.L. “Butch” Otter’s plans to use a $20.3 million federal grant for a state-run Idaho insurance exchange required by the federal health care overhaul.
Instead, discussions between legislators, Otter and the insurance industry have shifted toward a state exchange created without federal money, but that’s still sufficient to reassure U.S. Department of Health and Human Services officials that Idaho isn’t blowing them off.
They’re walking a thin line between keeping a federal exchange from being imposed on Idaho that could disadvantage the state’s insurers, while still letting “Obamacare”-loathing legislators tell constituents they didn’t bend to Washington, D.C.
“My major concern personally is accepting federal funding,” said Rep. Lynn Luker, R-Boise. “It would lock us in to what they want us to do.”
The 2010 Patient Protection and Affordable Care Act envisioned exchanges as a “one-stop shop” to buy affordable insurance. The federal government offered to pay and Otter’s administration won $20.3 million for the effort.
But with Idaho one of 27 states that sued over the 2010 health care overhaul on constitutional grounds, conservative lawmakers say they want nothing to do with the federal money.
Consequently, Sen. Dean Cameron, R-Rupert, and an insurance agent, says a smaller, undetermined sum — scratched from somewhere in Idaho’s tight budget — will likely be sufficient to at least get started. He said the important thing for Idaho is to not cede an exchange to the federal government, whose version he believes will disadvantage Idaho insurers and offer products that are more-expensive for consumers.
“It would make it easier to use the federal funds,” Cameron said. “But I haven’t spent much time thinking about that, because I have to deal with the realities of the day.”
House Minority Leader John Rusche, D-Lewiston, and a former health insurance industry executive, said letting the federal money slip through Idaho’s fingers simply to win House conservatives’ support is a costly political bargain.
“How many teachers is $20.3 million?” Rusche said. “We’re going to build this on our own, using our money, instead of putting it into education, with the hope that we’ll be allowed to vary from federal standards. How does that serve Idahoans?”
The U.S. Supreme Court is unlikely to deliver a final verdict on Idaho’s lawsuit over the overhaul until late June. Meanwhile, Republican presidential candidates are all vowing to repeal President Obama’s signature first-term accomplishment, if they’re elected.
Amid this uncertainty, some including Idaho Rep. Vito Barbieri, R-Dalton Gardens, are urging their legislative colleagues to do absolutely nothing.
“There is no distinction between a purported state exchange or federal exchange,” Barbieri said. “That’s why I’m suggesting we take an entirely private or market-based approach.”
It’s that rhetoric that has insurers like Blue Cross, Regence Blue Shield and PacificSource concerned the Legislature will simply adjourn without taking up the issue, increasing the likelihood that Idaho will get a federal exchange. Consequently, they’re paying thousands for a campaign, dubbed “Keep it in Idaho,” invoking the image of a big-brother government in Washington, D.C., foisting top-down regulations that drive up costs and make life generally miserable for Idaho consumers.
Idaho Association of Commerce and Industry president Alex LaBeau, whose group is allied with the insurers, says he’s reconciled to leaving the federal money on the table, but not to staying idle.
“The best thing we can do is to keep taking steps forward and put ourselves in a position to protect ourselves, and don’t gamble on a Supreme Court outcome,” LaBeau said.
Idaho Department of Insurance Director Bill Deal arrived at the 2012 Legislature in January intent on convincing lawmakers to use the federal money for an exchange that’s compliant with federal requirements, including minimum benefit packages and a system of subsidies to help people who with limited earnings with their payments.
Since they aren’t about to budge, Deal said, he’s now committed to at least getting started on an exchange with state funds.
If the federal government decides Idaho’s version doesn’t live up to requirements, the 2013 Legislature may be required to take up the issue again, Deal said.
“It’s without question not going to have all the items in it that accreditation will require,” he said. “But at least we’ve got a beginning. We can negotiate, maybe, and come to some agreement with Health and Human Services.”
Rep. Janice McGeachin, R-Idaho Falls, and House Health and Welfare Committee chairwoman, has helped lead the Idaho Legislature’s talks with insurers and Otter’s administration over an exchange.
In recent weeks, she said, the gulf has narrowed between proponents of using the federal money and those who don’t want to do anything at all.
“What I’m seeing is, both sides of the philosophical extreme are saying, ‘Neither one of those may be the best approach,’” McGeachin said. “A more palatable approach is doing the very minimum of what we need to do.”