In line with Utah’s focus on market forces, Utah’s Exchange is based on an “operational model,” which welcomes all insurers who meet minimum standards into the Exchange, relying on market forces to generate product offerings. Until recently, four insurers (SelectHealth, Humana UnitedHealthcare, and Regence BlueCross BlueShield of Utah) have offered a total of over 140 plans on Utah’s Exchange. Humana announced they would be pulling out of the UHE this summer (read the Salt Lake Tribune article here).
Read more about the Exchange here.
Utah’s Exchange offers a mixed bag for those who buy health insurance there:
Defined Contributions
- A benefit for employers who use the Exchange is that they can make a “defined contribution” towards employees’ premiums. This is a pre-determined amount of money each employee receives towards his or her insurance premium. This is different from the standard way employers contribute to their employees’ premiums: paying for a specified percent of each employee’s premium.
- Potential downside for employees: while the defined contribution makes it easier for the employer to predict costs from one year to the next, the employees stand to lose if their premiums increase and their employer chooses not to increase the defined contribution amount.
Increased Choice
- A benefit for employees is that they have more choice of plans when they are insured through the Exchange. No longer do they have to take the plan their employer has chosen for them, but can hand-pick a plan that best meets their needs—whether a lower cost high deductible plan with a health savings account, or a more traditional insurance plan with higher premiums and a low deductible. However, if the employee chooses a product that costs more than the defined contribution made by the employer, the employee pays the difference.
Cost
- A big downside so far is the problem of cost. Initially insurance premiums tended to be more costly inside the Exchange than out.Now they run about the same—which is still too expensive for most of Utah’s small businesses.
Utah’s small businesses want affordable, accessible health care coverage, but the price is too high for many of them. As reported by Small Business Majority (see the full report here) in 2009:
- Just 40% of Utah small business owners surveyed by the Small Business Majority reported paying for health insurance for their employees—of those, 78% say they’re really struggling to do so.
- Of the 60% who don’t provide insurance, 88% say they can’t afford it.
- The number one concern for Utah’s small business owners regarding healthcare reform is controlling costs, followed by having coverage that is guaranteed and covers everybody.
Check out UHPP’s Business Group on Health for more information about what’s going on with health reform in Utah’s business community.
Where to go from here: What’s Best for Utah?
Utah has a way to go before it will meet the federal exchange standards. Utah’s Exchange needs affordability standards, real risk pooling, and seamless integration of eligibility screening of premium subsidies and public programs. To ensure all Utahns have access to comprehensive, affordable, quality care and coverage, UHPP is working to take advantage of opportunities at both the local and national level.
Patty Connor, Utah Health Exchange Director, shares her vision for Utah’s Exchange in a recent interview.
Check out the Utah Exchange Watch to monitor the progress of Utah’s Health Exchange.