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N.H. Weighs Its Options for Health Insurance Exchange

Since the federal health reform law was passed two years ago, New Hampshire acted like an ostrich with its head in the sand, hoping the law would just disappear.

That never happened, and now, the coming months are looking to be hectic ones for state health and insurance officials.

Despite looming deadlines to comply with the Affordable Care Act, New Hampshire is among dozens of states that have done nothing to set up a health exchange, which is intended to be like a virtual shopping mall where individuals and businesses can buy insurance.

The state must now play catch-up to see whether there’s any way to maintain some measure of local control — indeed, whether it even wants that control — over its insurance market before the exchange launches in 2014.

“We’re just not prepared in any way shape or form, and these deadlines are virtually on top of us,” said Raymond White, a former Republican state senator from Bedford who now sits on an advisory board for New Hampshire’s exchange.

A year might seem like plenty of time to get the exchange up and running, but there are myriad questions over the types of benefit packages that can be offered and how the marketplace will be managed.

And though a few states, such as Vermont, started addressing those questions last year, New Hampshire is among dozens that have only begun to take up the issue.

New Hampshire’s health exchange advisory board began meeting this month and faces a critical decision that must be made by Feb. 15 on whether state regulators will work with the federal government to run the exchange, or let the feds do it all themselves.

The last-minute scramble results from a gamble New Hampshire Republican lawmakers took earlier this year, betting that the Affordable Care Act would get struck down in the Supreme Court or repealed with a change of leadership in the White House.

The gamble backfired and left state health and insurance officials rushing to address the issue, and without the benefit of federal money that was once available to them for planning.

In 2010, New Hampshire was awarded a $1 million “planning grant” to help with educating the public and study how the insurance industry would be affected, among other questions. But the state never drew down on that money.

The Legislature passed a law last year requiring the state to return two-thirds of the grant money, according to Jennifer Patterson, legal counsel for the New Hampshire Insurance Department. Then in a 3-2 vote last December, the all-Republican Executive Council, which must approve the receipt of funds by state agencies, denied the insurance department’s request to use the remaining $333,000.

“It was all over the Obamacare,” said Councilor Ray Burton, a Bath Republican, who voted along with Councilor Dan St. Hilaire in favor of drawing down the funds. “Perhaps it was a bit of political posturing.”

Councilors Chris Sununu, Ray Wieczorek and David Wheeler voted against using the money.

There are some other “establishment grants” New Hampshire could apply for, but the deadline to use the planning grant has passed.

“The planning grant money is gone,” Patterson said in an email to the Valley News, “and that particular grant will not be made available again.”

The decisions to refuse the money point to a larger philosophy shared by many Republicans that any effort to comply with the health care law, or even to use the funds available through the Affordable Care Act, would be an acknowledgement that “Obamacare” was valid, White said.

Led by House Republicans, New Hampshire legislators even passed a law this year banning a state-based exchange, effectively giving the reins over to the federal government and limiting the state’s say in how the program would be designed and managed.

“(House Republicans) felt we should just not comply whatsoever with this and even passing enabling legislation is helping in complying,” White said. “We should just not be complicit.”

White has worked in the insurance industry for more than 23 years and opposes the Affordable Care Act. Nevertheless, he argued against the ban.

White proposed his own bill that would have allowed New Hampshire to set up an exchange designed to “preserve and not displace” the private marketplace. It offered a kind of safety net that allowed New Hampshire to comply with the law while keeping some measure of state control over how the insurance market was managed. The bill was tabled.

“I thought it should be a backstop,” White said. “If we lost the Supreme Court decision, which we ultimately did, and if we lost the presidency, which we ultimately did, and just if everything went in the wrong direction and this thing was going to be implemented, New Hampshire should try to grab the controls and make sure we preserved our regulatory authority of our department of insurance and our department of health and human services and make sure we preserved the viability of our regional carriers.”

House Republicans prevailed, and the ban on a state-run exchange was put in place.

Long-term, New Hampshire may one day move in a different direction and set up its own exchange, but not until the ban is repealed.

“What we do out of the gate next year is not cast in concrete that says we couldn’t do that over time,” New Hampshire Health Commissioner Nick Toumpas said in a recent telephone interview.

A 12-member advisory committee made up of New Hampshire health officials, advocacy groups and insurance industry representatives began meeting Nov. 13, and will continue to get together monthly to discuss how the state should proceed.

Patterson believes there is some flexibility for New Hampshire to keep some amount of local control.

States that don’t want to run their own exchange are also given the option of working in partnership with the federal government, rather than cede complete control. In this set-up, the U.S. Department of Health and Human Services runs the exchange, but the state would regulate the insurance plans offered, just as it regulates insurance plans now, Patterson said. States that want to do a partnership have until Feb. 15 to decide.

The advisory board will be looking into the pros and cons of that question in the months ahead, said Toumpas. Its next meeting is Dec. 13.

After it decides, however, the real work of figuring out the exchange details remains, and many are unsure whether it can actually be pulled off. There are still a lot of questions that states have for the federal government, many wondering how the array of different parties — health departments, insurance departments, private businesses — should work together.

“(States) don’t want to sink another nickle into it or another minute of time thinking about it and say, hey feds, bring it, because it’s too complex, it’s too convoluted,” White said.

Lisa Kaplan Howe, policy director for the advocacy group N.H. Voices for Health, agreed that “there’s a lot of work” but hopes the final result will benefit consumers.

“We want to make sure this is truly run as a one-stop shop” for insurance, said Howe, who is on the advisory board with White.

Like others, Howe is mindful of the fast-approaching deadline to bring the exchange online. Everything needs to be ready by Oct. 1, 2013, which is when the initial open enrollment period begins.

Howe believes it can be done, but said New Hampshire should avoid rushing the transition. If not managed carefully, this virtual marketplace could backfire for the very consumers it is attempting to protect.

“You don’t want to get that up and running,” she said, “and have it be harmful to people enrolling in the plans.”

Chris Fleisher can be reached at 603-727-3229 or cfleisher@vnews.com.