Many people understandably thought the great health-care battle was settled by this year’s U.S. Supreme Court decision on NFIB v. Sebelius, which upheld the constitutionality of the Patient Protection and Affordable Care Act, more popularly called Obamacare.
Not so. An action taken in December by Gov. Butch Otter sets the stage for an almost-certain legislative skirmish this year. Idaho is not alone in trying to make sense of the poorly crafted law, one a former speaker of the U.S. House of Representatives said would have to be passed before anyone could know what was in it.
One of the never-ending devils in the details of Obamacare was a requirement that states either set up their own state-based, health-insurance exchange or the federal government would impose a federally-facilitated exchange on them
In concept, health-insurance exchanges can be looked at as central marketplaces where insurers must compete for individual and small-business customers whom the exchanges are primarily aimed at serving. Small businesses employ more than half of America’s private-sector workforce, yet less than half of these businesses can afford to provide health insurance for their employees, because of the high costs.
Before there was a President Obama, a health-insurance exchange was built in Utah, under an effort led by former state House Speaker David Clark and other Republican lawmakers. The key elements were voluntary participation and plenty of choice of insurers. Ironically, the Utah exchange may not qualify as a state exchange under Obamacare.
Many Idaho legislators are adamantly against establishing a state-based, health-insurance exchange. Their belief is that because the federal government imposed this on states, it can figure out how to establish and run it. Although sympathetic to the sentiment, Governor Otter opted to have the state build its own health-insurance exchange nevertheless.
“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,” said the governor in his December 11 news release. “Obamacare is not the answer. In fact, it very likely will do little or nothing to reduce costs while force-feeding us coverage and increasing the size and scope of government. But it is an unfortunate and unwelcome reality, and it would irresponsible of me to simply abandon the field to federal bureaucrats. ”
Should the Legislature and governor coalesce around a state-built exchange, here is small businesses’ (the intended beneficiaries) wish list.
• Real Choice— There should be many insurers offering a variety of plans and competing for small business customers based on cost and quality.
• New Opportunities—Health-insurance arrangements should be offered to small businesses in new ways. Small-business owners should be able to select one plan, multiple plans, or contribute a defined amount and allow employees to select a plan that best meets their individual health needs.
• Flexibility—The consumer should also be offered choices to purchase such products as high-deductible plans, defined-contribution plans, health-savings accounts, and limited-mandate plans. For years states have helped drive up the cost of health insurance by requiring insurers to include specific mandated benefits and services in their basic policies. Insurers must be allowed to tailor policies to the individual needs of their customers and not have the legal straightjacket of sameness clamped on them.
Obamacare is now the law of the land. And whether Idaho builds its own state-based exchange or punts the job to the federal government, without the three ingredients above, a health-insurance exchange and all the swirl of debate around it will have been just a noisy exercise in nothingness.
To date, the individuals and small businesses that will be required to buy on the insurance exchange have had the least input in the whole discussion. The most adamant supporters of Idaho forming its own health-insurance exchange include health insurers, health-care providers and big businesses—none of whom will be required to purchase health insurance from the exchange.
Furthermore, federal funds to set up an exchange run out at the end of 2014. That’s when state health-care exchanges are expected to be self-sustaining. Small business should not be charged for something that was designed as a resource and benefit for them. Health insurance fees for participation should not be passed along.
Suzanne Budge is Idaho state director for the National Federation of Independent Business.