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Utah faces deadline for decision on health exchange

Published October 16, 2012 11:58 am

Health reform • Utah leaders are running out of time to decide the fate of Avenue H.
This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

There's been no shortage of public hand-wringing over whether Utah should expand Medicaid.

But looming is another equally important health-reform deadline. On Nov. 16, just 10 days after the presidential election, Gov. Gary Herbert must send a declaration letter to federal officials, signaling the state's readiness to run an online health-insurance exchange. Accompanying it should be a description of how the online marketplace will operate.

But the blueprint hasn't materialized. And neither Herbert nor legislative leaders have said which of three available paths they would choose: Revamp Utah's existing exchange, Avenue H, to meet federal rules; partner with the feds on a new exchange; or let the feds set up one to compete with Avenue H.

"Determining what type of exchange to pursue is very complicated, compounded by the federal government's failure to answer a wide range of questions," said the governor's spokeswoman, Ally Isom. "To ensure due diligence for an issue of this magnitude, we do not anticipate having a final decision until mid-November, and possibly even later."

There have been no public hearings on the matter — only a private meeting between the governor's health advisers and legislative leaders last week.

Legislative health reform task force Chairman Rep. Jim Dunnigan said the meeting was "to see where we have agreement and where we don't."

The group talked about the options but came to no consensus, said the Taylorsville Republican. "I have not made up my mind. I've made no behind-the-scenes commitments or agreements."

Dunnigan has heard that the U.S. Department of Health and Human Services may move the deadline to Dec. 1. "We're still verifying that," he said.

Even that may prove ambitious, however. New legislative leaders won't be chosen until November, and the Legislature doesn't reconvene until January.

Regardless, Dunnigan said, "nothing significant will happen until after the election."

Hospitals haven't taken a position on the exchange, other than to say it could be a valuable tool for privately insuring some of the low-income people who will qualify for Medicaid under an expansion of the low-income health program.

"We would like to see if we can get human services officials to agree to do something different than a straight Medicaid approach," said Rod Betit, president of the Utah Hospital Association.

Utah already has an exchange, Avenue H — a web portal where small-business employees comparison-shop for coverage with contributions from their employers. About 7,000 people get their insurance this way.

To comply with the Affordable Care Act, Avenue H will have to scale up to handle all buyers, up to 300,000 Utahns by January 1, 2014, according to one actuary's estimate.

New regulations will dictate how insurers price their policies.

The exchange will have to calculate which buyers are eligible for federal subsidies and ensure the seamless flow of low-income residents between the exchange and Medicaid.

It would be remarkable for Utah to embrace the new federal model, said Lincoln Nehring, a health-policy analyst at Voices for Utah Children. "Most red states are leaning toward a federally facilitated exchange, or partnership exchange."

But leaders repeatedly voice concern about ceding control over functions such as regulating the insurance industry and determining who is eligible for Medicaid, Nehring said. "You can't describe their motivation as wanting to embrace the Affordable Care Act. It's more like, 'We think it's terrible, but if we keep our fingers on it, maybe we can limit some perceived risk or harm.' "

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