Spectra Newsroom

Utah Health Exchange Update
by R. Brent Bennett, Partner, Spectra Management

A result of HB 188 signed into law by Gov. Jon Huntsman Jr. in March, the Utah Health Exchange is our state’s approach to health system reform and marks the beginning of a defined contribution market and portable health coverage for Utah businesses. This is only the second health insurance exchange to be developed in the country.

The state explains “defined contribution arrangements” as employer group health plans individually selected by an employee. In a defined contribution arrangement, rather than promising or providing a certain level of health benefit, the employer provides a pre-determined level of funding that the employee then controls and uses to purchase their choice of health insurance.

One of the most crucial problems, locally and nationally, is that most of the uninsured earn low wages and often work in small firms. Thus, Utah has created an exchange focused on improving insurance options for this sector and leaves alone those who have good insurance today. And, the exchange facilitates consumer choice based on price transparency, not government regulation and control. The Utah Health Exchange provides a single shopping point where the employee can evaluate their options and execute an informed purchasing decision.

Designed for Utah employers, the program is rolling out on the following schedule:

•         2 to 50 full-time employees through 2011

•         Opens to large group in 2012

The program’s site (www.exchange.utah.gov) went live August 19, 2009 but an Employer Application Process which Spectra Management is assisting its clients with began August 17. Participation is restricted during a “Limited Launch” period to 100 to 150 groups. This period began August 17 and closes February 28, 2010.

What’s Next?

Many of the health insurance problems afflicting Utah are among the same that plague the nation. But Utah, unlike Washington, D.C., has sought practical, consensus solutions for the real problems rather than a sweeping remake that puts government in control.

According to the Utah Governor’s Office of Consumer Health Services: “It is important to remember that a robust exchange will be more than just a place to ‘apply for health insurance.’ While the initial focus of setting up an exchange is to establish a stable defined contribution market, this is just the first stepping stone in the process toward a consumer-oriented system.

“To facilitate consumer choice in the long run, it is clear that the portal must provide information relevant to not only health care financing but also quality and transparency of the health care system. The Exchange will also evolve into a tool for patients to make better decisions about their health and health care by providing access to information about cost and quality and health and wellness. The value of the Exchange is the sum of all its parts and each ‘part’ is essential to the long-term success of the portal and to the success of Health System Reform.”

R. Brent Bennett of Spectra Management is a Registered Representative of and offers securities products and advisory services through Royal Alliance Associates, Inc. Member FINRA/SIPC, a registered broker-dealer. Spectra Management is not affiliated with Royal Alliance Associates, Inc. This information is not intended to be a substitute for specific individualized tax or legal advice. Please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.