Last week's vote in the U.S. House of Representatives (HR1213) to defund and ultimately undermine state health insurance exchanges is telling and instructive for Utah's efforts to strengthen our own health exchange. A core provision of the federal health reform law, an exchange is a consumer-friendly marketplace where individuals and small businesses can shop for health insurance by comparing plans, pooling risk and applying for premium subsidies and public plan options. Most people buying insurance through the exchanges will be eligible for taxpayer-financed subsidies, and participating plans would have to take all applicants, regardless of prior health problems. Starting in 2014, sick people could not be charged higher premiums.
It's baffling that exchanges are the target of congressional leaders' opposition to the Affordable Care Act (ACA) in that the concept of exchanges actually came from the conservative think tank the Heritage Foundation and then quickly picked up bipartisan support — all the way to then Massachusetts' Gov. Mitt Romney's desk in 2006. The masterminds at Heritage saw the writing on the wall: they saw the new momentum for massive health reforms building across the states, and then ... epiphany! If there was any way to preserve the role of the private insurance market and stop Medicare-for-all or some such scheme, it would be through these exchanges. They drew lessons from countries such as Switzerland and the Netherlands: put the insurance companies in a box; force them to compete over the right things, like keeping us healthy, and not over the wrong things, like avoiding risk. What insurance companies might lose from disruptions to their current business model (avoiding risk), they would gain in volume.
Back in the days before health reform became a political bloodsport, only five years ago, then Gov. Jon Huntsman Jr. and his team were so taken with the idea of exchanges that they flew the Massachusetts' exchange (Connector) people out to Utah to present their beta version of the exchange to Utah policy makers and stakeholders. The room was full to the rafters, and the excitement coursing through the crowd was palpable. A year later, 130 of Utah's most prominent business leaders gathered together and formed a consensus for reforms designed around the mechanism of an exchange and for the same robust exchange standards that are now at the heart of the ACA.
Today Utah is one of two states with an exchange up and running, though Utah's Exchange has had a few false starts, and it has yet to meet the minimum ACA standards for exchanges. Yesterday's vote on HR1213 is a step backwards — a costly step — for Utah. Utah is finally making strides toward a more transparent health insurance market where Utahns can make prudent decisions about their health care based on good information. But do we really want to wait longer for affordable, quality and lower cost health insurance coverage for the small businesses that drive Utah's economy?
Utah's Exchange could still work and give Utah's small-business owners and self employed what they are clamoring for: the ability to pool risk, decent benefits for employees, transparency on the cost and quality of care and affordability measures and premium subsidies. But to do these things it needs ACA standards — and the funding and administrative support set aside in the ACA to meet those standards. The ultimate irony in HR1213 is that the exchanges are the foundation for a bipartisan reform package, for a reformed health care system that maximizes the role of the private market.
Judi Hilman is executive director of Utah Health Policy Project.