Utah has long been a leader in the drive to reform our nation's health care system. The rest of the nation would be wise to learn from the Beehive State.
Utah's success controlling health care costs has been particularly noteworthy. The Ogden-Clearfield metropolitan area spends less than any other U.S. city on medical care. Salt Lake City isn't far behind, with the eighth-lowest expenditures in the country.
Some of that cost-control success comes from the Utah Health Exchange, which was launched in 2009, even before the federal health reform law mandated such insurance exchanges nationwide. The system allows consumers to easily shop for insurance online and choose among competitively priced plans.
Exchanges are set to take root in all 50 states, per the terms of the federal health reform law. But there's more to Utah's health care example than our experience with exchanges. A handful of local lawmakers are working to share our state's expertise at controlling health costs. With health care set to consume a fifth of the American economy by 2020, America needs to hear that message more than ever before.
One Utah leader at the forefront of this effort on the national level is Sen. Orrin Hatch. Working with colleagues like Arizona Sen. John McCain and Maine Sen. Susan Collins, he's leading the effort to reduce health care costs across the country. Notably, Hatch is pushing for repeal of the Affordable Care Act's health insurance tax, which, if not scrapped, will send Americans' insurance premiums sky high.
The tax is designed to raise $78 billion over the next five years to help fund the rest of the health care law. To do so, the law imposes a variable fee on health insurers, with the amount paid dictated by the size of each insurer's revenue.
But that $78 billion has to be paid by someone — and those "someones" will be the individuals and small companies buying insurance, as the insurers pass on this new cost of doing business.
The tax will cost small businesses about $500 per employee annually. As a result, a small business with 25 employees could see an annual tax increase of about $12,500.
By making each employee a bit more expensive, the health insurance tax will actually discourage firms from hiring. That makes little sense, particularly with Utah's unemployment rate currently double its 2007 low.
The tax will hit middle-class pocketbooks, too. Former Congressional Budget Office director Douglas Holtz-Eakin has estimated that the tax will translate into a $10.6 billion premium increase for consumers in 2014 alone — $5 billion of which will hit those with annual incomes of less than $50,000. Only a tiny amount — about $41 million — will affect the nation's wealthiest households.
Sen. Hatch isn't the only Utahn to recognize the tax's devastating impact on the state's 241,000 small businesses and their 1.1 million employees. Utah's entire delegation in the House — Republican Reps. Rob Bishop and Jason Chaffetz and Democratic Rep. Jim Matheson — has sponsored legislation that would erase the tax.
This bipartisan group has also fought to preserve what works in our health care system.
As the federal health care law was being drafted, for instance, Hatch and his three counterparts in the House fought to preserve consumer access to licensed agents. These critical actors in the health care marketplace educate consumers about their coverage options and serve as advocates for their clients when issues arise.
Without access to brokers, consumers would be left to their own devices to decipher the intricacies of health reform. Without agents' expert counsel, they'd likely end up paying much more for coverage.
In the wake of the Supreme Court's ruling on the Affordable Care Act, the direction of health reform is more uncertain than ever. But there are some goals that everyone can agree on — lower costs, more jobs and more choices. The best way to achieve those goals is to find legislators who have shown a commitment to all three.
Colleen Mellor is President of the Utah Association of Health Underwriters.
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