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Republican lawmakers give thumbs down on health exchanges

Published November 15, 2012 8:07 am

Reform • Conservative governors want more time, but Utah legislative leaders are decided.
This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated.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.

Republican governors asked the Obama administration on Wednesday to delay Friday's deadline for states to decide whether to run their own online health insurance "exchange" marketplaces.

But conservative Utah lawmakers are decided – they want nothing to do with this provision of the Affordable Care Act.

"Utah should not spend any state time or money" to build, run or partner on a federal exchange, declared Republican legislative leaders in a Nov. 13 letter to Utah Gov. Gary Herbert. "The federal exchange is being built to implement federal advanced premium tax subsidies, to enforce an individual insurance mandate, and to impose insurance mandates on employers. These are not Utah health reform initiatives, and the funding and resources needed to develop this federal program should not be borne by Utah's citizens."

Herbert shares lawmakers' concerns, said his Deputy Chief of Staff Ally Isom. But he has not made up his mind, she said, about how involved Utah should be in running a federal exchange for residents. Utah's existing exchange, Avenue H, does not meet federal requirements. "We simply have more questions than answers," Isom said.

Last week the Republican governor's health adviser, Norm Thurston, indicated the Nov. 16 decision deadline was fluid.

Governors are still waiting for the U.S. Department of Health and Human Services to issue rules dictating how the federal exchanges will work.

"The new programs you championed will be an enormous strain on state governments and budgets, as well as the federal government. ... The timeframe and many of the provisions in the [health law] are simply unworkable," wrote the nation's 29 Republican governors and two governor-elects to the president on Wednesday.

Exchanges are designed to be a key path to health coverage for individuals and small businesses, much of it federally subsidized. They must be open for business starting October 2013.

If Utah does not change Avenue H to meet federal rules, the task of running a federal exchange would fall to the feds, which is fine by House Speaker Becky Lockhart, R-Provo. "This is a federal government program, the federal government passed it. The federal government decided to do all these taxes. We don't want to touch it with a 10-foot pole."

The governor has the authority to make the decision, said Lockhart. "We don't know what he is going to decide."

But without the Legislature's blessing, it's unclear how a state-based exchange would be financed. Multi-million-dollar grants are available to get them started, but after January 2015 they are supposed to be self-sustaining.

States have incentive to run their own exchanges because it will empower them to regulate their insurance markets and make decisions, such as what health procedures insurers must cover.

Lawmakers acknowledge this in their letter to Herbert, leaving open the possibility of changing their minds if the feds clarify the rules and they foot the bill.

"We have asked the governor to be very, very careful," said House Majority Leader Brad Dee, R-Ogden.