On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA), or Obamacare. Prior to this, only two states had created health insurance exchanges: Massachusetts and Utah. Unlike the federal plan, Utah’s health reform doesn’t rely on government mandates, and instead creates a voluntary health exchange. I emphasize that our exchange was created long before Obamacare.
The Utah Health Exchange (UHE) is among the State’s most critical initiatives right now, and has captured the attention of policymakers across the country. While health reform has become a political hot potato, especially since the passage of PPACA, Utah has lead out on the national stage, without the high costs and questionable mandates of other plans.
So what exactly is the UHE and how does it work? The UHE is essentially an internet-based portal. Representative David Clark, whose legislation created the Exchange, often used the analogy of an airport to describe it. Much like Salt Lake International Airport, which is operated by the city to connect providers like Delta Airlines to its customers, the Exchange is intended to connect insurance consumers to insurance providers. It is a single shopping point where consumers can evaluate their options, and then brokers, agents, and employers can share information.
The UHE is not Obamacare. It does not mandate participation. It doesn’t control health care prices or practices. Rather, it is centered on your freedom of choice. The UHE is based on the principles of personal responsibility, private markets, and competition. We don’t mandate that everyone have insurance, but we recognize the importance of being insured — both for the individual and the State as a whole. Rather than requiring coverage, the State instead provides a marketplace for all Utahns to find either individual or group insurance policies. Most people are familiar with employer provided health benefits where the employer offers the same health insurance plan to all their employees—a sort of one-size-fits-all. The UHE is different; employees can now use their employer contribution to purchase the policy that fits their unique needs, rather than the ‘one-size-fits-all’ plan. Through the Exchange, individuals shop for their own level of coverage at a price they determine.
Currently, Utah State law limits the Exchange to assisting small business groups with 2-50 employees, but it will soon be available to individuals and larger groups. The reason for the limitation is to allow the Exchange to test its technology on a small scale before accommodating a wider range of Utah’s population. During this testing phase, the State has found that the Utah Health Exchange is well equipped to handle its current load — 247 employer groups with more than 6,000 covered employees — and a lot of room to grow.
The federal reform plan goes into effect January 1, 2014, meaning our Utah-specific option must be adapt to the requirements for exchanges under PPACA before then. The Governor and I believe that, with the continued support of the Legislature, the Utah Health Exchange will meet that deadline and continue to lead the country’s health reform efforts in a uniquely Utah way.