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House bill would lift ban on health exchange planning by state officials

State House Bureau

February 26. 2013 6:55PM

CONCORD - State law bans officials from discussing, planning or enabling a state-based health insurance exchange, but a bill would end the gag order as a first step to exploring the possibly of a state-run electronic marketplace.

"This bill allows the possibility to pursue a state-based exchange at some point in the future," said the prime sponsor of House Bill 544, House Commerce and Consumer Affairs Committee Chair Ed Butler, D-Harts Location. "It does not mandate (a state-based exchange), it does not say we should go in that direction."

If a state-based health insurance exchange would be better for the state, lawmakers need to repeal the prohibition, he said told his committee Tuesday.

But opponents questioned why the state would want to operate its own exchange which they claimed could cost the state millions of dollars.

"Given the costs associated with this federal takeover of the country's health care system, there is no way New Hampshire taxpayers should get stuck with an unfunded mandate to put this deeply flawed law into place," said House Minority Leader Gene Chandler, R-Bartlett. "We support New Hampshire taxpayers, we support New Hampshire businesses and workers and we will take the steps necessary to ensure current law stands."

Last year lawmakers passed House Bill 1297, which prohibits the state from setting up a health insurance exchange as required under the Affordable Care Act.

However, under the 2012 bill, state agencies may cooperate with federal authorities, which will set up the state exchange because the state refused to do it.

The bill allows the insurance department to continue regulating health insurers and the Health and Human Services Department to continue establishing eligibility requirements for the Medicaid program, which would expand under the ACA.

Earlier this month, Gov. Maggie Hassan sent a letter to the federal Health and Human Services Agency asking to form a partnership to run the state's exchange.

Under the arrangement, the state would have oversight over the companies in the exchange and what policies they offer and over the federally hired "navigators" to help individuals and small business wade through the health insurance marketplace the exchanges provide in order to choose the best fit.

Under the ACA, states can have their own exchange, join with other states to establish regional marketplaces, partner with the federal government or let the federal government run the exchange.

Insurance Department attorney Jennifer Patterson told the committee it is too late for the state to establish its own exchange because there is not enough time to have one up and running by Jan. 1.

Because of the needed preparation, Patterson said, the state could not possibly establish its own exchange before 2016.

After several years, New Hampshire may decide to explore its own exchange after seeing what other states are doing, she said. If it does, lawmakers and state officials would need to change current law to discuss it, she said, and legislation would be needed to establish a state exchange.

Several Republican committee members pressed Butler and other bill supporters at the public hearing, asking why the state would want to spend money it doesn't have to on its own exchange.

The state would have to set up the whole mechanism for operating an exchange at a cost of millions of dollars, noted Rep. Frederick Rice, R-Hampton, and he asked several supporters testifying "What is the upside of this piece of legislation?"

Butler said if the state wants to explore hosting its own exchange, the bill will allow that discussion to go forward, which could not happen under current law.

"I doubt the state would pursue (its own exchange) if it is more expensive than a partnership," Butler said. "But there might be a benefit to the state and we ought to be able to have that discussion."

The committee did not make an immediate recommendation on the bill, but has to do so by March 6.

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