Idaho’s Otter Reverses Course on Obamacare, Disregarding Health Freedom Act

Published February 20, 2013

Idaho Gov. Butch Otter’s conversion from bellicose health-care rebel to boisterous lobbyist for one of the law’s critical elements—creation of a health insurance exchange as mandated by President Obama’s health care law—signals nothing less than a seismic shift for the gregarious Republican governor.

In January’s State of the State address, Otter said Idaho must implement a state-based exchange to allow its government to exert at least some control over the process.

“Rejecting the opportunity to assert ourselves will result in an unresponsive, one-size-fits-all federal exchange wreaking havoc on some of America’s most reasonable costs of coverage,” Otter said in his Jan. 7 address to lawmakers. “At its core, this is a matter of state’s rights.”

Otter’s chief of staff, David Hensley, introduced the bill in the Senate Commerce Committee the following week, and the governor’s office has created an online petition to pressure legislators to pass it.

If Otter rejected the exchange, the federal government would implement one. Officials in thirty states are currently scheduled to go that route, while 19 states and the District of Columbia will move forward with their own exchanges or other partnerships. The exchanges are currently scheduled to begin open enrollment on October 1, 2013, with coverage beginning January 1, 2014.

Conflicts with Health Freedom Act

Otter could encounter conflicts between his new exchange push and policies he previously championed. In 2010 he became the first governor in the nation to sign a Health Freedom Act, legislation essentially barring implementation of the federal health-care law in Idaho. At the time, Otter told reporters the measure would protect the state from the invasive federal government and, in turn, assert state sovereignty.

“What the Idaho Health Freedom Act says is that the citizens of our state won’t be subject to another federal mandate or turn over another part of their life to government control,” Otter said in a March 17, 2010 press conference.

Now the governor and his staff are singing a different tune. In January, Otter’s office released “Health Insurance Exchange Myths,” a document intended to push the exchange, arguing, “supporting a state-based exchange, is to assert our independence and our commitment to self-determination, while fulfilling our responsibility to rule of law.”

According to Goldwater Institute attorney Christina Sandefur, Otter’s new position conflicts with the Health Freedom Act he signed into law.

In a Jan. 30 letter to Idaho legislators, Sandefur explained, “establishing a PPACA state health insurance exchange in Idaho would conflict with the state’s Health Care Freedom Act,” which protects the “right of all persons residing in the state of Idaho in choosing the mode of securing health care services free from the imposition of penalties” including “any civil or criminal fine, tax, salary or wage withholding, surcharge, fee or any other imposed consequence.”

“State exchanges that conform to [Obama’s law] are inconsistent with this safeguard because they are the key vehicles for implementing the individual mandate tax,” Sandefur writes, meaning, “Idaho public officials who operate exchanges would be violating state law,” and “the Attorney General is charged with taking legal action against those who do so.

Other Governors Disagree

Legal or not, Wayne Hoffman, head of the Idaho Freedom Foundation, scoffs at the notion a state-based exchange would protect state sovereignty.

“This is a move to implement Obamacare and to help Idaho become a patsy for the federal government,” Hoffman said. “The state will have no control, only the illusion of control.”

Hoffman says other Republican governors who’ve rejected the exchange have been more consistent. Wisconsin Gov. Scott Walker, for one, rejected the exchange and called it “state-in-name-only.

“No matter which option is chosen, Wisconsin taxpayers will not have meaningful control over the health-care policies and services sold to Wisconsin residents,” Walker wrote in a November 16 letter to U.S. Health and Human Services Secretary Kathleen Sebelius. “If the state option is chosen, however, Wisconsinites face risk from a federal mandate lacking long-term guaranteed funding.”

No Real State Control

Hoffman is concerned some Idaho lawmakers—the only hurdle between Otter and establishment of an exchange—are being persuaded by the governor’s public relations push.

“There are some legislators out there that have bought into the notion that the state will have some control over this thing,” Hoffman said.

State Rep. Vito Barbieri, R-Dalton Gardens, isn’t one of them.

“I am for no state-based exchange,” Barbieri said. “If the feds want to come in and set up their own exchange and impose it on Idaho, then we’ll deal with that.”

Like Hoffman, Barbieri senses deep division about pursuing the state option. “It will probably come down to a few votes either way,” he said, adding that the bill is a done deal in the Senate and more likely to be defeated in the House, though Idaho Senate Majority Caucus Chair Russ Fulcher, R-Meridian, is the highest-ranking legislator to buck the governor’s call for the state option.

“With expertise and fiscal resources scarce, and with other complications caused by an unpopular nationwide mandate for citizens to purchase insurance, the federal government is under immense pressure having to impose federal-based exchanges in so many states,” Fulcher wrote in a recent editorial for the National Federation of Independent Business. “The feds should be granted every opportunity to fail, and hopefully they will.”

Dustin Hurst ([email protected]) writes for Idaho Watchdog.