Josh Goodman is a former staff writer for GOVERNING..E-mail: firstname.lastname@example.org
Massachusetts and Utah have embraced health exchanges, but will Utah's work?
Conservative Utah doesn't usually have a lot in common with liberal Massachusetts. But both states have embraced health exchanges - one of the big ideas in health-care reform. As Utah ramps up its exchange, the question that its experiment will answer is whether an exchange will work without Massachusetts-style government interventions.
A health exchange creates a place online where individuals can shop for different health-care plans, a concept that has conservative intellectual roots. So it was somewhat ironic when Massachusetts moved on the idea first, combining an exchange with things that conservatives generally don't like - mandates and expansions of public health insurance programs - to achieve the nation's highest rate of people with insurance.
Health-care reform legislation coming out of Congress closely follows the Massachusetts model, which includes a requirement that everyone buy health insurance - a model Utah policymakers would prefer to avoid.
Utah wants to figure out how to build a free market for health care. House Speaker David Clark acknowledges that if someone is having a heart attack, he's not going to shop around for the hospital with the best price. But he thinks consumers should be making more choices in health insurance plan selection. Today most employers present people with their health insurance options. "I've worked for the same bank for 33 years," Clark says. "I've never picked my own health insurance."
Enter the Utah Health Exchange, under which employers give each worker a lump sum of money to use toward purchasing one of its plans. The hope is that each employee can pick a plan that suits him or her best; that insurance providers will compete to offer the best, most affordable plans; and that employers will enjoy some limits on their health costs.
So far, the state has encountered some bumps in its demonstration project for small businesses that began in 2009. The biggest problem is that prices are higher for insurance in the Exchange than outside of it.
To Judi Hillman, executive director of the Utah Health Policy Project, those price disparities are proof that Utah needs to be more aggressive in regulating the cost and quality of insurance. "This is their last test to prove that Utah doesn't need national reform," Hillman says. "They're going to fail the test."
Utah officials, though, don't think they'll fail. They're working to eliminate the price disparities, but they're not going to pursue Massachusetts-style regulation. Utah's plan is to open the Exchange to all small businesses later this year. The state will soon be a great case study in whether the conservative approach to health-care reform will work.
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