In 2009, Utah established a health insurance exchange for small business, now known as Avenue H. Currently it’s open to small business employees. Ever-increasing premiums caused many companies to drop coverage altogether. Our vision was to provide a better solution for small business rather than dropping coverage. I’ll use this example: Four years ago XYZ Corp. was paying $400 per month per employee for health insurance. When the premiums increased to $525, the company dropped coverage.
Moreover, XYZ had to pick a one-size-fits-all health insurance plan for all employees. Young single employees probably want different things in a policy than someone married with children. Mrs. Smith works for XYZ, and her husband works for ABC Company. XYZ will contribute $400/month, and ABC will contribute $125 as well. If XYZ joins Avenue H, the Smiths can combine the amounts from both employers and get a good health insurance plan. Moreover, they can choose among dozens of health plans from different insurers at Avenue H. The result is that the Smiths have a health insurance plan they like, both employers contributed, and the Smiths are happy, and probably healthy, employees.
Along came the Affordable Care Act mandating that all Americans get health insurance and that an exchange be created in every state. If a state won’t do it, the federal government will. Governor Herbert and the majority of the Legislature have no appetite for mandated coverage, but they do want to increase Utahns’ access to reasonably priced health insurance. They also want to avoid having a federal bureaucracy administering the Utah health insurance market. We can do it better and cheaper.
There are still a lot of unanswered questions; however, on the December 14th deadline, Gov. Herbert made the best decision possible under the circumstances. He formally requested Secretary Sebelius to approve Avenue H. Notwithstanding many naysayers, HHS has been quite encouraging. This seems the best way to avoid a federal takeover of our insurance market and to keep us off the road to a single-payer system.
Small businesses in Utah will continue to have the choice of seeking traditional group policies or moving to the defined contribution plans offered through Avenue H (www.avenueh.com). Individuals and families in Utah without access to insurance at work can qualify for all available federal tax credits and use those credits to buy policies that meet their needs. Utah’s health insurance system will be protected by local oversight from officials that understand Utah’s markets and systems.
This has been a very tough call for conservative governors. They don’t want to embrace “Obamacare”, but they also don’t want to leave the field to the federal government. Once it establishes a federal exchange and begins to dictate which insurance companies can participate and what health insurance must cover, it’s no stretch to imagine a complete federal takeover of Utah’s health insurance market. Utah Policy
