(KCPW News) The Utah Health Exchange went online this August, aimed at making health insurance more affordable for small businesses and individuals. But the opposite has happened for many who signed up for it. Governor Gary Herbert’s health reform advisor, John Nielsen, says something has to be done to correct the problem.
“We were as surprised as anybody when this problem arose with the ratings and we don’t think it’s insurmountable and it’s just too important to let it fail,” Nielsen says. “And we’re committed not to have that happen.”
Nielsen says the exchange isn’t working because it sets up parallel markets, both offering the same type of insurance, called defined contribution plans. He says the exchange is attracting health care consumers who are higher risk, and therefore given higher premiums. Nielsen says there are two changes that could make the exchange work as intended: funneling all defined contribution plans through the health exchange, or a modified community rating system.
Health care advocates, like Lincoln Nehring with the Utah Health Policy Project, see this shift toward previously unpopular health care mandates as a positive step toward health reform in Utah.
“Just because the insurance companies have not been able to, or haven’t done everything they need to do to keep prices competitive in the exchange, our policy leaders are vested in this process and they’re not going to walk away,” Nehring says. “They’re going to see this through and make sure it works.”
Nehring says UHPP favors a modified community rating as the way to drive down costs on the health exchange. This concept would force insurance carriers in Utah to set their prices based only on the age of an individual and lifestyle choices like smoking, instead of considering pre-existing conditions.