EXCHANGE: Let's play myth, fact

The lack of hard information is reason enough to stop any legislation moving forward to creating a state-based health exchange (SBE), but the misinformation, whether intentional or not, is what bothers me most about the conversations going on. So let’s start with some facts.

Myth: Idaho citizens will need to go to a state or federal exchange to shop for health insurance. Fact: There are currently PRIVATE exchanges operating in this state and there will be more that do not require the interference of a government intermediary.

Myth: Idaho citizens will get lower rates with a SBE. Fact: The rates are the rates in and out of an exchange, federal or state, by law! It’s true, Idaho has some of the lowest rates. A carrier operating inside a state or federal exchange is allowed to geographically rate their plans. Market forces are still at play. If a carrier wants to be competitive, they will need to adjust their rates to be competitive with our already low rates. Blue Cross of Idaho and others will still be an option on the open market and through a private, if not federal, exchange.

Myth: An SBE will have lower operating costs than a federal exchange. Fact: We don’t know how much either will cost. And according to the state’s own hired consultant, the very reputable consulting firm KPMG, a state-based program in Idaho will cost more than a federal program. Vermont estimated that it would cost $87 per enrollee per month. Idaho has estimated $7. KPMG estimates $10mm per year to run the exchange. If you look at Massachusetts, that has been running their exchange since 2006, Idaho’s enrollment by comparison might be about 54,000 people. So let’s assume we get 54,000. That’s $10mm divided by 54,000 equals about $15 per month, double the Idaho estimate. Why would we advance something we know so little about?

Myth: Citizen’s eligible for a government subsidy will pay higher premiums through a federal exchange. Fact: People eligible for a subsidy pay “premium” as a percent of family income — it won’t matter who the insurance company is in this regard.

Myth: Customer service will suffer if handled by a federal exchange. Fact: Customer service will suffer regardless. There will be so much confusion that, unless you are absolutely sure you qualify for a subsidy, you will seek out a local insurance agent for options, not a government exchange of any kind.

Myth: 85 percent of Idaho citizens will qualify for a subsidy due to our relatively low wages. Fact: There are many, I would suggest most, in that low wage category that won’t qualify for a subsidy simple due to the fact that one spouse has a decent job that provides benefits. Having access to benefits through an employer plan disqualifies spouses and children from getting a subsidy.

Myth: we must act now to maintain control for our citizens. Fact: there is very little control with either. According to Jonathan Hurst, a policy advisor in Texas, the insurance exchange mandate is a “logistical and administrative nightmare, and 90 percent of the rules that will govern these things have yet to be written.” We have the option at a future date to transfer the exchange to a state-based plan after all the kinks are out and the costs identified. The time is not now for Idaho to move forward with a state-based exchange.

MARK FISHER

Hayden