communication technology: Insurance News - Idaho Insurance Exchange Draws Backing

By Elaine Williams, Lewiston Tribune, Idaho
McClatchy-Tribune Information Services

Feb. 12--Raising the possibility of job losses and higher premium prices, many Idaho hospitals and insurance providers are pushing for a state health insurance exchange instead of letting the federal government handle that part of health care reform.

Regence BlueShield of Idaho and the Idaho Hospital Association are among the backers of a recently launched website, www.keepitinidaho.com, that encourages citizens to lobby their state lawmakers to pass legislation needed to form a state exchange.

Increases in costs for consumers, a structure designed for large urban markets instead of more thinly spread populations such as Idaho's, and a lack of access to decision-makers are among the concerns insurance providers and hospitals have about a federal exchange.

Every state has until 2013 to demonstrate to the federal government it's capable of creating its own exchange, said Shad Priest, director of regulatory and legislative affairs for Regence BlueShield of Idaho.

Those that don't, by default, will opt into a federal exchange that will begin at the same time as the ones run by the states, in 2014.

The introduction of the exchanges will coincide with implementation of a new rule that requires everyone to carry health insurance and will provide tax credits to people who can't afford the coverage.

The exchanges will help clarify what constitutes the basic level of medical insurance that people need to comply with the federal rule.

The exchanges will then establish online marketplaces where consumers, not covered by their employers, and small businesses can compare the costs of like products and find out which of the products qualify for tax credits, Priest said.

It's impossible to know if Idaho's legislators will pass the bill needed for a state exchange, Priest said.

Not everyone in Idaho health care is opposed to a federal exchange. Syringa Hospital and Clinics in Grangeville could benefit from a state or federal exchange because either one would reduce the number of patients without insurance, said Joe Cladouhos, chief executive officer.

More than 21 percent of Idaho County residents the hospital serves have no insurance, Cladouhos wrote in an email. "That means they are 'self pay' which (in the current economy) quite frequently translates to 'can't pay.' In 2011 Syringa Hospital & Clinics wrote off over $813,000 as bad debt/charity care."

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The state exchange, as proposed now, might grant too much authority to health insurance providers, Cladouhos said.

"A federal exchange would certainly be more in sync with national leadership and standards designed to assure affordable, quality health care coverage," he said in his email.

At the same time, some believe it's pointless to initiate a state exchange until the U.S. Supreme Court rules on a case brought by some states, including Idaho, challenging health care reform, Priest said. That decision could come as early as June.

That thinking, however, is flawed because there's no guarantee the court will reject health care reform, said Toni Lawson, vice president of government relations with the Idaho Hospital Association in Boise. "When you try to put a big project into place in a short time frame it usually makes it more challenging to do it in the most cost-effective manner."

A state exchange offers many advantages to Idahoans versus the federal option, in part because of how many unknowns exist involving the way health care reform will unfold, Lawson said.

Idaho has some of the lowest health insurance rates in the nation and it's possible a federal model would result in higher prices for consumers, said Lawson, whose organization represents all five hospitals in north central Idaho, including St. Joseph Regional Medical Center in Lewiston and Gritman Medical Center in Moscow.

If an exchange is run from Washington, D.C., the bureaucrats in charge may not understand that someone in Grangeville doesn't have six hospitals in convenient driving distance as they would in an urban area, Priest said. "Idaho is a unique market. We're very rural."

A federal exchange could be less responsive to changes needed as the reform is enacted and people figure out more about how it works, Lawson said.

A federal exchange also might eliminate jobs in Idaho, either through limiting the role of the 5,000 agents who sell health insurance or removing the state's existing insurance providers from certain parts of the market, Priest said.

The rules in a federal exchange might be so complicated that it wouldn't make financial sense for Regence to participate, Priest said.

The federal government might also pick the insurance providers that would be allowed to offer insurance in the exchange and nothing dictates that Regence or any of its Idaho competitors would be selected, Priest said. "What happens in that regard is going to be completely out of our control if we defer to a federal exchange."

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