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Governor’s group recommends state-based health exchange

A working group put together by Idaho Gov. C.L. Butch Otter recommended Oct. 26 that the state create its own health insurance exchange, rather than let the federal government run the system in which individuals and small businesses compare and purchase health insurance and receive incentives.

Business groups and insurance companies and brokers have called for Idaho to run its own exchange, saying it would allow the state to have more control over its insurance market. During the working group’s meeting, Alex LaBeau, president of the Idaho Association of Commerce and Industry, said that while the federal health care laws of 2010 will lead to rising health care costs, having a state-based exchange is the only way Idaho can have any control on increases.

The working group’s recommendations now head to the governor. Otter’s spokesman, Jon Hanian, wouldn’t comment on when the governor will make his decision. Insurance Department director Bill Deal said he expects the recommendations to factor into any decision the governor makes. The governor also created a task force on expanding Medicaid. That will next meet in November.

Idaho and other states have a Nov. 16 deadline to notify the federal government if they want to run their own exchange. If the state doesn’t act, the federal government will run an exchange, reducing the state’s control over its insurance market.

The recommendations say that implementing a state-based exchange will cost the state $77 million, plus $10 million in annual operation.

In past meetings, industry experts told the work group that the state had run out of time to set up its own exchange. At the Oct. 26 meeting, Brett Graham, a partner with health care consultants Leavitt Partners, said the federal government would be as flexible as they could with states that want to set up an exchange but don’t meet federal requirements.

Two conservative members of the 13-member working group, Rep. Lynn Luker, R-Boise, and Wayne Hoffman, executive director of the Idaho Freedom Foundation, opposed the group’s recommendation. Luker said Idaho should wait a year before moving forward with a state exchange, to see if the federal government changes its policies, perhaps due to a change after the November election.

Hoffman said Idaho shouldn’t enter into any arrangements with the federal government> He compared the relationship to spousal abuse and said that the federal government shoves programs down the state’s throats.

“We keep getting beat up by the federal government and we keep running back to the federal government,” he said. “I think it’s time we take a stand.”

The Idaho Health Exchange Alliance, a business group with over 300 members that supports a state-based exchange, commended the recommendation.

“A state-based exchange will help Idaho maintain local control over health insurance costs and will benefit Idaho’s economic stability,” Heidi Low, executive director of the Idaho Health Exchange Alliance, said in a news release.


About Brad Iverson-Long

Brad Iverson-Long is a reporter for the Idaho Business Review, covering banks, financial services, technology and new business.