Insurance exchange not faring well

Published: Tuesday, Dec. 15 2009 12:16 a.m. MST

SALT LAKE CITY — Having an Internet-based health care insurance exchange that would allow consumers to sign up for coverage the same way a customer uses the Web to book travel may be a great idea in concept, but it leaves a lot to be desired in practice.

In the four months since the Utah Health Care Exchange was launched, more of what's wrong than what's right is coming through.

Only 13 of the 136 small businesses that signed up to use the exchange to provide more customized, ostensibly less expensive insurance benefits to their employees have remained. Many more are ready to sign up, according to exchange managers, but dozens of others have dropped out or simply haven't enrolled for various reasons, including higher cost, — a lot higher in some cases.

Besides price, which can vary 30 percent to 60 percent higher than plans now offered through employers, businesses report that the site is not user friendly. A survey by the state released Monday found businesses just trying to find out about the exchange are being forced to go through a 40-point questionnaire.

Price has been problematic for proponents of the exchange who have been working since 2005 to promote it is as a way to get a handle on health care costs that even in Utah's low-cost/great-care niche nationally will reach more than $25,000 per year per family in about 12 years.

"Everyone expected there would be problems surfacing going in," said Utah House Speaker David Clark, R-Santa Clara. "But to find 30 to 40 percent higher rates on the exchange than those outside it, there must be some kind of secret sauce ingredient or unknown variable that is preventing a real solution."

Clark said he has had multiple meetings with carriers and government agencies the past two months, "and taken risk pools, and age and 200 other variables down to the individual employee, and there is still something missing. And, deafening silence when I asked what that could be."

The exchange dominated discussion at the Legislature's task force on health care reform Monday. Task force members asked for a special meeting to review the bumpy course of the exchange that they want to be a model for other states and even the federal government. They said they're concerned that the exchange could easily morph into some kind of parallel market and veer off its intended goal of putting more health care decisions in the hands of consumers.

Given the generally negative reports from the small employers who have wanted to sign up and the daunting numbers of plans to choose from — 66 in all at this point — participation is, in fact, discouraged rather than encouraged, task force members were told.

In addition, because many employees were laid off due to the poor state of the economy, the pool of possible clients seeking coverage is once again skewing toward older workers. The goal is to attract young, healthier people and to put selecting a plan ultimately in the consumers' hands.

The hope is to attract the small businesses in Utah that don't currently offer, or have recently dropped, health insurance as a fringe benefit. The expected result, which is still daunting but very achievable, is that lower premiums for individuals and companies with no loss of quality in care, said exchange proponent and free-market reform advocate Norm Thurston

Many of the people who are being laid off now are looking to start their own businesses and are looking to find insurance through the exchange.

"If what we're doing to streamline the process of signing up and all we're doing is making it faster for people to find rates they can't afford anyway, they're not going to opt in," said Thurston

e-mail: jthalman@desnews.com

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