Health Insurance Exchange: State or Fed Controlled?

Oct. 26--TWIN FALLS -- After weeks of discussing the right course for Idaho, an advisory group will announce its final recommendations on how the state should set up a health insurance exchange.

Under the Patient Protection and Affordable Care Act, states must set up an online health insurance exchange that's up and running by Oct. 1, 2013. It is now up to Idaho to decide if it will allow the federal government to control the exchange or choose to go with a state-based exchange.

Earlier this year, Gov. C.L. "Butch" Otter appointed a 13-member working group to submit its recommendations on how the state should set up an exchange. Once given the recommendations, Otter has until Nov. 16 to announce Idaho's decision to the federal government.

A state-run exchange is a popular option among state and local officials. However, the reform law's tight deadline structure doesn't give states much time to create something from scratch. If Idaho can't show the federal government it can have an exchange operating by Oct. 1 of next year, the federal government has the authority to take over the exchange.

Despite the quick turn-around, Idaho has the time and resources to set up a state-based exchange, said Heidi Low, director of the Idaho Health Exchange Alliance, a coalition of local health care leaders.

"The timelines are tight but it is doable," Low said.

Idaho will make the deadlines if it chooses to run its state-based exchange through a nonprofit, said Julie Taylor, director of governmental affairs for Blue Cross Idaho.

Idaho has a precedent of using a nonprofit to meet federal healthcare requirements. In 2009, Otter designated the Idaho Health Data Exchange to oversee federal grants for health information technology.

In order to speed up setting up the exchange, Otter should approve the nonprofit through an executive order, Taylor said.

"We tried passing a state exchange with legislation last year and it didn't go anywhere," she said. "If we wait again for the Legislature to approve a nonprofit, we would waste all that time between now and then."

While no one knows exactly what the exchange will look like, local business leaders want the exchange to remain in Idahoan hands.

"I think a state exchange would be accountable to Idaho businesses," said Cally Parrot, vice president corporate relations/organizational development for Buhl-based Clear Springs Foods.

"I really believe in preserving our state rights and we can better control the costs and minimize the costs," she said. "A nonprofit can continue to move forward in that way, to continue keeping costs low and generally improving the health in Idaho."

Debbie Lattin, who owns a Twin Falls insurance company, agrees.

"A nonprofit exchange keeps healthcare costs in a free market situation," she said. "That's really what we need for employers and employees."

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