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Council backs off health exchange

Insurance market review voted down

The Executive Council decided yesterday against hiring a Massachusetts firm to advise the state on establishing a health insurance exchange required by the federal health care overhaul.

The council has already authorized spending $666,000 to examine establishing a marketplace for private health insurance plans. But the rejection yesterday of a $610,675 contract with the Wakely Consultant Group of Winchester, Mass., means the state Insurance Department must propose another contract in order to spend the money.

Deputy Commissioner Alex Feldvebel said the deadlines of the federal law and the rules of the state procurement process mean New Hampshire may not be able to use federal money to plan an insurance exchange. If that happened, the state could use its own money to pay for the development of an exchange or wait for the federal government to design an exchange for it. The law requires states to have a working exchange by 2014.

'It may, practically speaking, in the end mean that New Hampshire has chosen to default to a federal exchange,' Feldvebel said.

The five councilors, all Republicans, voted unanimously against the contract. Councilors have expressed concerns that the team Wakely proposed for the project included only a few New Hampshire residents. They have also suggested the company's role developing an exchange in Massachusetts indicated it might promote a costly and expansive system.

'Their experience was not what we wanted to see,' Councilor Chris Sununu of Newfields said yesterday.

Sununu said the Insurance Department could use its own resources to review possible structures for an exchange.

The money for the contract is part of a $1 million federal planning grant that was accepted by the legislative Fiscal Committee. The grant commits the state to planning for an exchange through activities like studying how various designs would affect the commercial insurance market and how people would move between Medicaid and commercial insurance.

But the state could still choose not to establish an exchange and wait instead for the federal government to establish one for it. In that case, the federal government would make decisions about structure as a government agency or non-profit organization, Medicaid eligibility, and which health insurers could sell policies, Feldvebel said.

House Speaker William O'Brien said the House would work to return the $666,000 to Washington with instructions to use it to reduce the federal deficit.

(Karen Langley can be reached at 369-3316 or klangley@cmonitor.com.)

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