Panel backs state exchange

BOISE (AP) - The House Health and Welfare Committee backed a state-based, nonprofit insurance exchange Thursday, conceding that it wasn't a perfect solution, but it was better than merely accepting a version run from Washington, D.C.

The 10-1 vote sets the stage for long and spirited House debate. Two weeks ago, the Senate debated for about six hours, before passing a similar measure.

"It has a tremendous amount of support," said Rep. Luke Malek, R-Coeur d'Alene, a Health and Welfare committee member. "We know there's a lot of support and it's logically the thing to do."

A state-run exchange allows for more state control, Malek said.

"It allows for more discretion, with Idaho trying out its own options rather than feeding everything to the federal government," he said.

Coeur d'Alene Sen. John Goedde, who sat on a committee that earlier analyzed marketplace options for Gov. Butch Otter, said he is impressed by the House bill.

"I think the newer bill is an improvement," Goedde said of the House bill compared to the Senate version.

He acknowledged that if the bill passes the House and Senate, there will be pressure to meet the October deadline for kicking off enrollment. The exchange must be functional by next January.

"It's still feasible it can be done," Goedde said. "The advantage we have is there are a number of other states significantly ahead of us. We can use the work they've done in creating our own exchange."

Otter backs this plan for a state-designed online marketplace for individuals and small businesses to buy insurance, arguing that it keeps Idaho in control and will be less expensive than a federal exchange.

Under President Obama's 2010 health care overhaul, exchanges will be required starting Jan. 1.

Lawmakers on the panel agreed with the Republican governor, saying they believe defaulting to the federal version - as governments in about 25 GOP-led states have - will leave Idaho without a seat at the negotiating table.

"Idaho should be a leader," said Rep. Christy Perry, R-Nampa. "Idaho is not giving into ideology here... I think Idaho is taking a stand and protecting its citizens rather than just handing everything over to the federal government."

Critics counter Otter is knuckling under to demands of the federal government - and big insurers in Idaho who favor a state exchange.

Karen Calisterio, of the libertarian-leaning Republican Liberty Caucus of Idaho, said state-exchange backers were merely taking "a seat at the table of tyranny."

Others offered lawmakers even more-dire warnings.

"Gov. Butch 'Ottercare' Otter is ordering the people of Idaho to accept fascism over freedom," said Joseph Rohner III. "Those of you who vote for this bill will be, by your actions, forever branded as fascists."

However, Peggy Munson, AARP Idaho state volunteer president, said her group has conducted recent telephone polling that suggests Idaho residents, regardless of political persuasion, favor a state-based exchange.

"Some say taking no action or delaying action is the best way to go," Munson said. "These are not the choices we have. Like it or not, there's going to be a health insurance exchange in Idaho."

Though the Senate has already passed its own bill, this new measure includes several changes meant to boost legislative oversight - and remedy concerns important to the conservative, Republican-controlled House.

Among other things, it includes prohibitions on the exchange asking applicants questions about whether they use, own, possess or store guns or ammunition. It includes a 19-member, governor-appointed board of directors that gives three legislators - two from the majority party, one from the minority - a vote in decisions.

Yearly exchange audits would be required, the board must meet in public and comply with Idaho open records laws and any contracts must be awarded through a formal, competitive process.

The Senate must vote again on this new bill, but Otter - as well as Senate President Pro Tem Brent Hill, R-Rexburg - have signaled their support.

The exchange issue is so divisive in Idaho, not even religious-based groups agree on it.

Idaho has already forbid insurers from providing abortion insurance over the exchange, but anti-abortion activists say that's not good enough.

Kerry Uhlenkott, a lobbyist for Right to Life of Idaho, argued that adopting a state exchange would assist the federal government in forcing insurers to provide emergency contraceptives that can also result in abortions of newly conceived fetuses.

But the Roman Catholic Diocese of Idaho backed the state exchange, saying Uhlenkott's concerns were best addressed with lawmakers in Washington, D.C., not in Boise.

"We also know that we need to take action now on the state level to protect the life of all vulnerable populations in Idaho, especially those who currently do not have access to affordable and life-saving health care.," said Christine Tiddens, a Diocese representative.

Staff writer Alecia Warren contributed to this story.