Idaho Politics

William L. Spence: Insurance exchange is like Travelocity, lawmaker says

WILLIAM L. SPENCE, politics reporter,Lewiston TribuneOctober 8, 2013 

The new state-based insurance exchange probably won’t drive down health care costs in Idaho, but other Affordable Care Act reforms could accomplish that goal, a Lewiston lawmaker said.

Idaho House Minority Leader John Rusche, D-Lewiston, offered a primer on the new law during a recent presentation at Clarkston City Hall. The retired physician and insurance company executive was invited to talk by the Asotin County Democrats.

Rusche is a member of the Idaho Health Insurance Exchange Board, which developed the rules and procedures governing the state’s insurance marketplace, which kicked off Oct. 1,

“I think of it as Travelocity for insurance,” he said of the exchange. “Travelocity is (an online) marketplace where you can purchase airfare, hotel rooms and car rentals, and where you can compare products and prices.”

That’s exactly what the insurance exchange will be, Rusche said, although it has a few extra components to check how much federal tax credits someone qualifies for and/or to determine their Medicaid eligibility.

Both Idaho and Washington have chosen to build a state-based exchange, which should be cheaper to run than the federal exchange and give the states more control over its operation.

The Affordable Care Act requires most Americans to have health insurance coverage beginning Jan. 1. Most will get insurance through their workplace or be covered by Medicare and Medicaid. Others will have to buy insurance. Those who earn 100 percent to 400 percent of the federal poverty level will be eligible for federal tax credits, as long as they buy insurance through an exchange.

Rusche noted that Idaho’s exchange calls for “navigators” who can offer in-person assistance and help people figure out how to use the exchange. Most will be employed by nonprofit entities such as libraries or public health services. They won’t advise people on which insurance plan to buy, but they can help walk people through the process.

No matter how efficient the exchange is, though, Rusche said it probably won’t attract enough competition to drive down prices.

“There are about 700 companies licensed to sell insurance in Idaho right now, but three or four have most of the business,” he said. “The big companies can’t make money here. It’s a market-based decision: Idaho doesn’t have a big enough population to bring in more competition.”

And even if more insurers did decide to participate, their prices wouldn’t be significantly different, given that many regions only have one hospital available to provide services.

Nevertheless, the Affordable Care Act attempts to control rising health care costs by instituting reforms in Medicare, Medicaid and other government health plans.

“Right now, about half of all health care in America is paid for by government, and mostly by the federal government,” Rusche said. “The cost has been growing much faster than the rate of inflation. And what are we getting for all that money? We’re down at the low end as far as life expectancy (compared to other industrialized countries), so by that measure we’re pretty mediocre.”

Prompted by the ACA, the government is beginning to shift provider payments away from the fee-for-service model — in which providers earn money based on the volume of services they provide — toward an outcome-based approach that rewards providers for quality of care.

“Have you heard of ‘never’ events — things that should never happen, like leaving a (surgical) instrument inside your stomach or cutting off the wrong leg?” Rusche asked. “Up until about two years ago, Medicare still paid for those procedures. Now it’s stopped.”

Last year the government began focusing on hospital readmission rates, imposing a financial penalty on institutions that do a poorer job of following up with patients and ensuring that they don’t have a recurrence of their illness.

“They’re trying to incentivize good care by punishing you (financially) if you don’t,” Rusche said.

Other reforms include offering incentives to move toward an electronic medical records system, which could reduce duplicate lab tests and improve care by helping physicians remind patients of things like immunization schedules and cancer screenings.

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