Idaho embraces health insurance exchange — reluctantly

Businesses helped Gov. Butch Otter persuade legislative opponents of Obamacare to pass the exchange.

KAISER HEALTH NEWSSeptember 24, 2013 

On Election Night, Bill McCarrel Jr. watched teary-eyed residents crowd into his historic Eagle bar, The Gathering Place, after President Barack Obama won a second term. His customers worried aloud about losing access to their guns and having to accept the federal health law that many revile as socialized medicine.

Like most people in this fiercely Republican state, McCarrel opposes Obama’s health care overhaul — even though he's uninsured. But the former junior high principal is looking forward to shopping on the online insurance marketplace in October to see whether he can get a plan he can afford.

McCarrel, 55, is thankful the Legislature — prodded by the governor and powerful employer groups — decided to have the state operate the exchange rather than leave it to the federal government.

“People in Idaho don't trust the state government, but they trust Washington, D.C., even less,” he says in his spacious bar, housed in a former drugstore built in 1906.

Of the 16 states that are gearing up to operate their own online marketplaces — a central feature of the effort to expand coverage to millions of people starting in January — Idaho is the only one where Republicans are in total control of state government. Republicans outnumber Democrats 4 to 1 in the Legislature, and only a third of Idahoans voted for Obama last fall — the third-lowest tally nationwide.

MORE POWER, LESS MONEY

Nonetheless, employers and Otter, staunch opponents of the law, were able to convince tea party activists and other critics that having the state run the marketplace where individuals and small businesses shop for coverage could result in less expensive premiums — and keep control in Boise.

“In Idaho, people have a fierce resolve to do things themselves. … We want to prevent ceding any more control to the federal government than is necessary,” says Otter, who credits business leaders — along with hospitals, insurers and other stakeholders — for putting pressure on legislators to approve a state marketplace.

Alex LaBeau, president of the Idaho Association of Commerce and Industry, the state’s most influential business lobby, argued the state could better control costs, offer more choice and preserve the role of agents and brokers.

His group helped elect more than a dozen new “business-friendly” state legislators who supported a state-run marketplace, also called an exchange.

“The business community always prefers to work with state government, as our state agencies always pick up the phone when we call,” LaBeau says.

COMING: THE MARKETING CAMPAIGN

As Idaho races to launch its exchange this fall, the state will face the added challenge of trying to persuade a citizenry known for its anti-government leanings. Exchange officials are hopeful an education campaign using direct mail, billboards, churches, and websites like Facebook and Twitter, among other things, can help them overcome doubts about participating.

“There is an independent spirit of Idahoans, and we are rising to the challenge,” Amy Dowd, the exchange executive director, says in her office across from the Capitol.

Working with a $20 million federal planning grant, the exchange has had plenty to do to be ready to open for enrollment Oct. 1, with coverage to take effect Jan. 1.

A lot is a stake. About 200,000 of Idaho’s 1.6 million residents will be eligible to buy coverage in the exchange, which will also sell insurance to small businesses. While the state has some of the lowest insurance costs in the nation, it has an 18 percent uninsured rate, higher than the national average.

Blue Cross of Idaho launched a website called GetCoveredIdaho.com to publicize the new exchange and plans to work with community groups, local colleges and the state’s library system to promote it. Spokeswoman Karen Early said that like residents in most states, Idahoans are confused about how the exchange will work.

NEXT: EXPANDED MEDICAID?

If the exchange is successful, proponents — including some Republican lawmakers and employers — say it could help persuade skeptical lawmakers to expand Medicaid, the other central piece of the health care act, expected to come up again next year.

Burley Republican Rep. Fred Wood, a retired emergency room physician who heads the Idaho House Health and Welfare Committee, says lawmakers came to the realization this spring that they could no longer fight the reforms.

“The fact is, that gig is up and it’s going to happen, so let's make sure we do it our way, not someone else’s way,” he says.

Wood's daughter, Ashley, is one of nearly 300,000 uninsured state residents. She works as a bartender nearly 40 hours a week at Bardenay, a restaurant-distillery in Downtown Boise.

“I worry about it as I'm now 30 and getting to the time in my life to have babies,” she says as the weekday lunch crowd gathers.

She says the lowest price insurance she's found is $175 a month, and that's too expensive for her. She hopes to find a better price through the exchange.

SETTLES: I WANT TO OFFER INSURANCE

Employers with more than 50 full-time employees, like Bardenay owner Kevin Settles, will be required to offer coverage under the health law beginning in 2015.

Settles, who is on the exchange board of directors, says the mandate requires him to offer insurance to about 60 employees, including Wood.

Settles says he also pushed for a state-run exchange because he thought it could help keep costs down. He notes the Idaho exchange will have a 1.5 percent surcharge on policies sold in the marketplace to pay for administrative costs. The federally operated exchanges will have a 3.5 percent surcharge.

Despite the one-year delay in the employer mandate, Settles plans to extend coverage to all his full-time workers next year. “I am tired of the uncertainty, and it is a benefit I would like to provide — if it's a benefit I can afford,” he said.

EXCHANGE FOE SEEKS CHEAPER INSURANCE

The only industry group to oppose the state-based exchange has been the Idaho Farm Bureau, which represents 15,000 farmers and ranchers. But spokesman John Thompson says he expects many members to be willing to buy coverage on the exchange despite their ideological opposition.

“If it makes economic sense to them, they will do it,” he says.

Jim Grissom, an embroidery store owner in Downtown Boise, is waiting to see. The 55-year-old doesn't like the health care reforms, particularly the mandate that requires most people to have insurance. He says he spends $700 a month on coverage now because his wife insists on it; he thinks “it's a waste of money.”

“I hope we find something cheaper,” he says.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente. This KHN story was produced in collaboration with USA Today.

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