Idaho is faced with a choice created by the health care reform law:  Establish a state-based health insurance exchange or have a one-size-fits-all solution imposed on us by the federal government.  Governor Otter appointed a workgroup to study Idaho’s options and make recommendations, and the workgroup recommended moving forward with a state-run exchange operated within a nonprofit model.

Why We Support a State-Run Exchange

·         Preserving State Rights:  By establishing a state-based exchange, we would preserve, protect and defend Idaho’s legislative sovereignty.  Building a state exchange helps Idaho citizens maintain a voice in the discussion about health care reform.

·         Lower Cost, No Federal Tax:  Idaho has some of the lowest health insurance costs in the nation.  That may not continue if the federal government is allowed to make choices for us.  We do know the cost of administering a federal exchange will be much greater than a state administering its own – thus adding unnecessary bureaucratic taxes to premiums.  A conservative estimate puts the federal tax at $36 million annually.

·         Local Regulatory Control:  Idaho should keep control over its insurance market.  We should not allow the federal government to take control over such a critical aspect of our lives.  In a state-based exchange, Idaho would maintain control over the design, governance, regulation and marketing of its insurance market.

·         Jobs:  The health insurance industry provides thousands of good jobs to Idahoans, jobs that may be at risk in a federal exchange system.

·         Relentless focus on quality outcomes – recognized as Healthgrades Distinguished Hospital for Clinical Excellence 3 years in a row (top 5% hospitals in the country for lowest mortality and complication rates); Joint Commission certifications in stroke and diabetes care, as well as Level II trauma certification by American College of Surgeons

·         Implementation of  Patient Centered Medical Home Model and participation in the Multi-Payer Medical Home Collaborative

·         Clinical integration with a physician-led organization striving to achieve the triple aim of better health, better care and lower costs

·         Conversion to Electronic Health Records in inpatient and outpatient settings

·         Implementation and expansion of regional telemedicine infrastructure to improve care in rural communities and keep care close to home

·         Creation and implementation of a regional community health and wellness strategy

·         Cost reduction initiatives using LEAN and Six Sigma methodologies to cut waste out of the system while improving patient safety and quality

The Supreme Court’s decision on the health reform law places states in the driver’s seat with respect to Medicaid expansion.  Governor Otter appointed a 15-member workgroup to collect and analyze data from various national consultants and experts regarding Idaho’s various options, and to make a recommendation as to which of the following options is best for Idaho:

·         Status quo (implement mandatory Medicaid expansion only)

·         Reform state/county indigency programs (plus mandatory Medicaid expansion)

·         Expand Medicaid to 138% of federal poverty level

After thoroughly reviewing and analyzing data and comparing options, the workgroup voted unanimously to support moving forward with the optional Medicaid expansion, with specific caveats:

·         Personal accountability must be incorporated into plan design, with the goal of improved health outcomes for Medicaid enrollees

·         Transformation of the health delivery system must occur, with shift in incentives and efforts to address Idaho’s primary care workforce shortage

Why We Support Medicaid Transformation & Expansion

·         Idaho Can Leverage This Opportunity to Transform Idaho Medicaid:  By participating in the optional Medicaid expansion, Idaho can implement a Medicaid benefit design incorporating personal accountability while transforming the care delivery and payment system to strive toward a healthier Idaho workforce and lower healthcare costs.  Importantly, this also presents an opportunity to invest in transforming Idaho’s community mental health system, which needs the resources to assist in recovery as well as protecting public safety.

·         Significant Cost Savings in State and County Budgets:  By implementing the Medicaid expansion option, Idaho’s existing county and state indigent health care programs could potentially be eliminated, at a time when these programs are experiencing escalating growth trends but are not structured to incentivize wellness or appropriate use of medical services.  Over the next 10 years, the net savings if both the mandatory and optional expansion provisions are implemented is $6.5 million.  Without implementing the optional expansion, Idaho will incur additional costs of $284 million over the next 10 years due to mandatory Medicaid expansion, without the offsets to help pay for it.

·         Prevents Additional Cost Shifting Due to Medicare Hospital Payment Cuts:  The health reform act reduces Idaho hospital Medicare payments by $500 M over the next 10 years.  For Saint Alphonsus Health System, these cuts are projected to impact our Boise and Nampa facilities by approximately $110 M over the next 10 years.  Implementing Medicaid expansion would potentially completely offset these losses, thereby preventing cost shift to the commercially insured population as well as negative impacts to jobs and healthcare services.

·         Economic Impact:  Economists have estimated that beyond the net savings achieved by implementing optional Medicaid expansion, there is also a multiplier effect from the $9.24 B in federal funds that would flow through the state over 10 years, including 16,000 potential new jobs and $615 M in sales, property and income taxes.