Now What?

The race to build an Idaho health insurance exchange will be a sprint


In its haste to hit the bricks, the Idaho Legislature has left a newborn on the steps of the Statehouse. The Idaho Health Insurance Exchange--which will be fully grown by the time lawmakers return in January 2014--had many parents and its delivery was arduous.

"It was probably the most bruising fight that any of us had ever seen at the Legislature," said Corey Surber, director of community health initiatives for the Saint Alphonsus Health System. "It was very, very difficult."

Republicans and Democrats didn't line up along traditional party lines in the six-hour debate on the floor of the Idaho Senate, with Montpelier Republican Sen. John Tippets saying that, "to ignore the laws of this nation would be to start down the road to anarchy," while Boise Democratic Sen. Branden Durst argued that the measure "lacked legislative oversight."

Not to be out-blustered, members of the Idaho House took seven hours to air their grievances, with Boise Republican Rep. Lynn Luker comparing a state-run health care exchange to a "tar baby," with his GOP colleague Challis Rep. Lenore Barrett saying the Legislature was "the only body politic on the planet that will kill a horse in order to have a horse to beat."

Like it or lump it, those tasked with nursing the infant that is a health insurance exchange are urging Idahoans to be good parents and try to let go of the politics that shadow Obamacare.

"Think back to a year ago," said Shad Priest, director of government affairs for Regence Blue Shield of Idaho and former deputy director for the Idaho Department of Insurance. "In early 2012, a lot of people were sitting back, hoping that President Obama wouldn't be re-elected."

Rick Wagner, who specializes in health care reform as director of business development for Eide Bailly LLP, said Obamacare deniers were bound to be disappointed.

"It came before Congress and you heard, 'Oh, it will never pass,'" said Wagner. "Then it went before the Supreme Court and you heard, 'Oh, they'll strike it down.' Folks, the train has left the station and the worst thing you can do is nothing. If you wait until Jan. 1, 2014, I promise you, it will be too late."

Wagner, Priest and Surber stood before a room full of owners of Boise businesses--big and small--April 3 at a special event sponsored by the Boise Metro Chamber of Commerce, giving attendees a crash course on the health insurance exchange, telling them that the race to create an exchange is now a sprint and warning them of looming deadlines and penalties if they didn't get with the program. Some attendees shook their heads or shared loud whispers about their disgust for Obamacare; some attendees asked a laundry list of questions; but most attendees couldn't write fast enough, taking volumes of notes on something that most citizens know little, if anything, about.

"I've had a slide deck on this topic for several years," said Surber, referring to her PowerPoint presentation at the Chamber event, detailing the history and implications of a health insurance exchange. "But I must tell you that this is probably my 70th version of my slide deck."

Surber's role was to set the record straight, busting some myths along the way, on health reform in general and the exchange in particular.

"Let's look at the cost of health care: It's 17.6 percent of our nation's gross domestic product; health expenses have outpaced our economy since the 1960s and one in five American families experience financial difficulty due to medical bills," she said. "In another country, it would be a scandal if anyone went bankrupt due to health costs."

Surber also reminded the audience that more than 50 million Americans are uninsured.

"The Affordable Care Act shifts us from a nation of 50 million uninsured to less than 18 million uninsured. Make no mistake, this is the largest piece of social legislation since Medicare and Medicaid," she said.

Priest said the first thing Idahoans need to know is that they're going to be hearing a lot more about the term "qualified health plans" in the next several months. That's when he displayed a cartoon graphic with some serious information. The cartoon showed a podium--not unlike a winners platform that you would see at the Olympics, only that there were four tiered steps inside of three.

"At the top, you see the platinum medal. That represents a qualified health plan that will cover 90 percent of medical costs," said Priest. "One step down is the gold medal plan [80 percent coverage of medical costs]; next is the silver plan [70 percent]; then there's bronze [60 percent]."

Priest's next graphic got everyone's attention. Even those still a bit sleepy from the 8 a.m. starting time for the Chamber event jolted awake, as a real-world example exemplified how much people might pay for health insurance through the exchange.

"Let's take an example of an individual paying for a silver plan [covering 70 percent of medical costs] through the exchange," he said.

The graphic showed that an individual making between $11,170-$27,925 would be paying anywhere from nothing to approximately $187 a month; additionally, that individual would qualify for a cost-sharing subsidy, driving out-of-pocket expenses even lower. A family of four, making as much as $57,000, would pay anywhere from nothing to $387 for coverage while also receiving a subsidy, pushing the price lower.

Lower premiums and subsidies are "carrots," but the exchange also comes with quite a few "sticks."

"As an individual, if you don't have coverage in 2014, you will have to pay a penalty of $95 or 1 percent of your income, whichever is higher," said Wagner. "In all honesty, I don't think that's too bad and you probably won't be seeing a mad rush to buy. But look what happens in the years to come."

Wagner pointed to a graph that showed noncoverage penalties ballooning in 2015 to $325 or 2 percent of income, and in 2016 it grows to $695 or 2.5 percent of income. The penalties would be indexed to inflation thereafter.

"Please don't shoot the messenger," said Wagner. "So many people had their heads in the sand, hoping that something would change or delay this. That's not going to happen. Get your heads out of the sand."

Wagner also guided attendees through a series of new taxes that have been triggered since the introduction of Obamacare, including an increase in Medicare payroll taxes, a new 3.8 percent tax on net investment income and new limits on flexible savings accounts.

Another key number for employers is simple to remember: 50--the number of full-time equivalent employees that distinguish a large employer (more than 50) from a small employer (less than 50). Simply put, a large employer is subject to penalties if it doesn't offer affordable and adequate coverage.

Wagner said the politics in Washington, D.C., weren't much different than they had been at the Idaho Statehouse.

"Democrats tell me, 'Let it go.' Republicans say, 'We're going to let the train crash and see what happens.'"

But that train is moving, and fast--the exchange is scheduled to pull into Idaho in fewer than eight months.