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A Closer Look: Utah's Health Insurance Exchange

Governing's John Buntin speaks with the new director of Utah's health exchange on how it's progressing.

Click here for full coverage of the Affordable Care Act.

In most states, responsibility for designing health insurance exchanges is vested in departments of health and human services. Not in Utah. Its exchange, which was created in 2007, resides in the governor's Office of Economic Development. That's because Utah views insurance for small businesses as a key economic development driver. Not surprisingly, Utah Gov. Gary Herbert turned to the private sector to recruit former Ceridian executive Patty Conner. Since last December, Conner has served as the new director of Utah's health exchange. With a budget of $600,000 and a staff of just two, it's her job to roll out what has emerged as the model exchange for conservatives. I recently spoke with Conner and the Office of Economic Development communications director Michael Sullivan about how Utah's exchange is progressing.

How do you describe the Utah Health Exchange to people who aren't familiar with it?

Patty Conner: The Utah exchange was initially established for small business employees. The intent was to provide them with a solution that gave them not only options between multiple carriers and plan designs, but also helped them understand what's available out in the marketplace so that they can pick a price and a plan that meets their family needs. Our solution provides the technology backbone that facilitates the comparisons of plans and the enrollment process. In addition, we developed a defined-contribution market for the exchange that does not exist in the traditional market.

Why did government need to get involved in doing this? Why not just leave it to the marketplace?

Michael Sullivan: I'll answer that question since it predates Patty's arrival. The reason that we felt it was important to get the government involved in providing a private-sector/government partnership is that many small businesses with two to 50 employees felt it was very difficult to find affordable group coverage. In other words, if I've got five people, and one of them gets cancer, all of us lose our insurance. One of the initial drivers was how do we help overcome this group size problem, and how do we overcome some of the health issues?

We also looked at it as an opportunity for the private sector to participate in developing a new model and a new method by which they could reach people. We weren't putting out requirements or restrictions or minimums; we were giving companies an opportunity. To be quite frank, we were surprised at how well it was received.

Could you provide a brief timeline of the Utah Health Exchange?

PC: In 2005, we started the discussions about how we might approach health-care reform in the state. Then in 2007 we signed into law legislation that created the exchange. In 2008, we created the defined-contribution market and set up the technology solution. The following year we did our limited launch. Initially, we had 11 employer groups join the exchange in January 2010 with 150 covered lives, and that grew to 42 employer groups with 1,146 covered lives. Beginning on January 1, 2011, we opened it up for all small employer groups to join the exchange.

What has the response been?

PC: Currently, we have 100 employer groups enrolled and 2,880 covered lives. Our numbers have grown steadily since January.

Do you have any projections for what you think enrollment will be at the end of the year?

PC: Our goal is to have 1,000 employer groups and 25,000 covered lives by January 1, 2012. It's a lofty goal, but I am confident that we can get there.

How have you approached publicizing or marketing the exchange?

PC: Our approach has been to reach out to the insurance broker community, educate them first and then reach out to the small business group. We've been doing a lot of outreach to insurance agents. In the last quarter, we conducted training on selling within the Utah exchange for over 250 brokers.

What have you learned from the process of rolling this program out?

PC: First, being able to get all of the stakeholders to buy in on what the exchange is trying to accomplish and aligning that with their values has been beneficial for everybody. For example, the brokers are really critical to the success of the Utah Health Exchange. Second, [you need to make] sure you have a rating methodology that provides parity with the traditional market for a level playing field. Finally, it's important to beta-test your exchange before opening it up to a large-scale enrollment.

Utah has always described its exchange as a website -- "Travelocity for health exchanges" is the phrase I've heard. What kind of tools does the website offer customers? Have you tried to give consumers information about quality and value?

PC: There are 146 different plans on our exchange, with various prices, copays and deductible levels, so that employees can choose which plan fits best for them and their family. We also map doctor networks. When it comes to plan quality -- like, "How do I know which of the four carriers offer the best plan designs or best service?" -- consumers want to look at some quality scores. We are in the process of getting ready to display that information this year, most likely the third quarter of the year. We will do that with key data elements like how long it takes to turn around claims, what's their customer service like and what's the consumer survey feedback scores on those particular carriers? All of that information will actually be displayed on our website, as well as in the shopping tool for the employee to access.

What else is coming? What else are you working on this year?

PC: Several things. First, we are improving the core functions of the technology to make it even easier for employers and brokers, and shrink timelines. Second, we are building elements into the system that might make it available to larger employers, especially those in the 51-99 employee range. Finally, we are helping low-income people get access to existing public programs that they already qualify for.

Let's talk about the Affordable Care Act (ACA) and 2014. It sets forth certain requirements which state-level exchanges have to engage in. How do your current activities match up with statutory requirements there? What are the issues where you're not exactly in line?

PC: We're building the right system for Utah, regardless of the ACA, but as far as we know, our current and future plans should not be significantly impacted should we need to comply with the ACA to avoid a federal exchange being imposed on us. We still need to see what the various rules and regulations will be, but we're optimistic that our approach will be allowed to proceed.

How many small employers taking part in the exchange are offering health insurance -- or rather, a defined contribution for health insurance -- for the first time?

PC: Our statistics show that 20 percent of the people enrolled didn't have group health coverage previously.

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Elizabeth Daigneau is GOVERNING's managing editor.
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