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Utah’s Health System Reform: HB 133
by Laura Summers, Research Analyst, Utah Foundation
With the support of chief sponsor Representative David
Clark, Senate Sponsor Sheldon Killpack, and 47 co-sponsors, Health System
Reform (HB133) passed both the House and the Senate and was signed by Governor
Huntsman on March 19, 2008. The goal of HB 133 is to enhance and preserve the
health of all Utah residents and it is lauded as being the first step to real
system reform at the state level. It requires the Department of Health, the
Insurance Department, and the Governor’s Office of Economic Development (GOED)
to work with the Legislature to develop the state’s strategic plan for health
system reform.[1]
Real system reform will not happen quickly or easily;
therefore, HB 133 uses what has been referred to as a 1-3-6-10 approach to
health system reform. During the first year, the bill calls on the Legislature
to enact specific changes to establish a foundation for reform by developing a
task force and working to lower costs of insurance premiums. Over the next
three years, the Legislature is to develop and implement a plan to address six
areas of need, recognizing that it may take as long as ten years for full
implementation of reform.
Task Force
Steps taken during the first year include establishing a
task force consisting of 11 legislative members (four members from Senate and
seven members from the House). The purpose of this task force is to review and
make recommendations for the state’s development and implementation of a strategic
plan for health system reform. A report, including proposed legislation, is
scheduled to be presented to the Business and Labor Interim Committee before
November 30, 2008.[2]
To ensure the task force deals with the real issues of
systemic reform, five stakeholder input groups were created that operate under
the leadership of the task force and other legislative members. The five input
groups are business, hospitals, providers, insurers, and the community. Each of
these working groups has an appointed “special master.” The job of these
legislative “masters” is to facilitate communication between each group and to
make certain its ideas are fully represented to the task force. The stakeholder
input groups have been meeting separately with their special masters to
coordinate ideas and develop proposals. During the regularly scheduled monthly
task force meetings, representatives from the input groups present findings and
recommendations from their respective groups. After considering the different
policy proposals, the task force will develop and prepare its final report.
While all of the input groups are still in the process of
developing and finalizing their respective proposals, a few of these groups
have presented their initial findings at previous task force meetings. The
community group, which is comprised of individual citizens, medical providers,
business representatives, and policy analysts, recommends Utah’s health system
reform promote competition based on efficiency, quality, equity, and value
through the use of community ratings, reinsurance, and risk adjustment
mechanisms. They believe reform should provide incentives for healthy
lifestyles and the appropriate use of healthcare through the implementation of Health
Care Homes and individual mandates (which are essential in a community rated
system). This group also recommends optimizing public programs, conducting an
independent affordability study, and increasing transparency and value through
the creation of a health benefits commission and the use of a market
facilitator like the internet portal.
The insurance group, consisting of representatives from
major health insurance companies, small carriers, and the broker community, is
currently developing legislation that would allow the creation of a health
insurance product that provides more options for those leaving their existing
insurance plan in an effort to encourage people to stay insured and avoid an
individual mandate. It would be available to individuals who have recently left
a group or employer plan and would lower the amount of time an employee must be
on their previous group plan from six months to three months. They anticipate
the product will cost one-third less than the average large group plan.[3]
In order to control inflationary healthcare costs and
promote economic vitality, the business input group recommends implementing
health system reform that promotes transparency and the full disclosure of
costs by providers and insurers. They want this information to be standardized,
easily understandable, and readily accessible. This group also promotes the
availability of Health Savings Accounts (HSA), and supports the use of an
insurance internet portal.[4]
The other stakeholder input groups are developing proposals as well, and are
scheduled to present their findings and proposals in future task force
meetings.
Six Areas of Need
The six areas of need identified in HB 133 by chief sponsor
Representative Clark include: [5]
- Ensuring that patients have access to information about
the cost and quality of healthcare and that there is a real opportunity for the
exchange of clinical health information by providing tools that help providers
and insurers supply this information
- Creating incentives for patients to assume ownership of
their health, health insurance, and healthcare which will, in turn, help the
consumer understand how the health system works and make better healthcare
choices
- Optimizing state programs by engaging in educational outreach
aimed at identifying and enrolling individuals and children in existing public
programs in order to decrease the number of uninsured. This also includes using
federal waiver amendments and policy to direct patients toward private health
insurance solutions through expanding the scope and accessibility of programs
like Utah’s
Premium Partnership for Health Insurance (UPP)
- Making health system reform a collaborative effort by working
with community partners to help the uninsured find ways to become enrolled in appropriate
public or private insurance plans, as well as working with businesses,
insurers, and providers to develop the best approach for establishing real
reform at the state level
- Effectively lowering the cost of health insurance
premiums by establishing a non-refundable tax credit for those purchasing
health insurance with taxable income
-
Developing a 16-point strategic plan to guide health
system reform into the future. HB 133 outlines the 16 measures that must be
considered (but not necessarily implemented). These measures include health insurance
market reform, development of best practices, promoting personal responsibility
(possibly through the use of individual mandates), modifying public programs to
support private health insurance, maximizing tax benefits, and modernizing the
Public Employees Health Program (PEHP) by allowing state employees to purchase
individually-owned policies through a system of defined contributions.
Governor’s Office of
Economic Development
Included in HB 133 is the enactment of the “Health System
Reform Act” which requires GOED to serve as the coordinating entity when
working with other executive branch agencies and to report and assist the
Legislature with the state’s strategic plan for health system reform. An Office
of Consumer Health Services (OCHS), under the control of GOED, was also
established to coordinate with the Insurance Department, the Department of
Health, and the Department of Workforce Services in developing a web portal
which provides access to private and government health insurance websites and
electronic application forms. The purpose of this web portal is to increase the
transparency of the insurance market.[6]
OCHS is also responsible for facilitating a private sector
method for the collection of health insurance premium payments made for a single
policy by multiple payers (for example, coordinating partial payments from
employers, UPP, and the employee and routing them to the insurer). OCHS will
also assist employers by creating a free or low-cost method for purchasing
health insurance by employees, individuals, and self-insured business owners
using pre-tax dollars.
Increasing Private
Insurance Utilization
A key aspect of Utah’s strategic plan for health system
reform is promoting personal responsibility by encouraging people to obtain health
insurance. In order to help people obtain health insurance, the Legislature
wants to create a system of subsides and Medicaid waiver provisions that bring
more people into the private insurance market.[7]
Some of the key waiver provisions the state is attempting to implement include
expanding UPP to cover people using individual policies, the Utah Comprehensive
Health Insurance Pool (HIPUtah), or COBRA, extending the enrollment waiting
periodfor Utah Children’s Health Insurance
Program (CHIP) and UPP from 90 days to six months for those voluntarily
dropping individual coverage, and creating an option that would allow the state
to shift some Disproportionate Share Hospital (DSH) funding to UPP if enrollment
increases up to current federal cost limits.[8]
The
state is also considering whether or not to include a provision that would
prohibit children from enrolling in CHIP if their parents qualify for UPP. The
purpose of this provision is to keep families on the same healthcare plan and allow
children who do not have the UPP option to enroll in CHIP. The problem with
this provision is that it potentially violates several federal regulations and
the Center for Medicare and Medicaid Services (CMS) has expressed concern about
children potentially receiving fewer benefits under UPP than they would under
CHIP.[9]
These waiver modifications must be approved by the CMS, which is an agency
within the U.S. Department of Health and Human Services (HHS). Since HHS
Secretary (and former Utah governor) Michael Leavitt challenged Utah to take
the lead in state health system reform, it is felt that Utah will receive
support for most of these waiver amendments.
Conclusion
Utah is in the first year of its health system reform
process, a process which, as noted above, is expected to take up to ten years
before real reform can be fully implemented. While much of the groundwork has
been laid in this first year, much more work must be done. Continued
cooperation and involvement from a diverse group of health system stakeholders
is necessary for real systemic reform to take place at the state level. Given
healthcare’s impact and costs to our community, it is hoped that this effort
can be sustained and success is realized.
This article is excerpted from a research
report by Utah Foundation describing Utah's health system reform efforts. The
full report will be available at www.utahfoundation.org.
Find out about the Utah Intergovernmental Roundtable Annual Summit: A discussion of Utah’s health system reform:
Issues, Implementation, and Impact
[1] Health
System Reform, H.B. 133, State of Utah General Session (2008).
[3] “Minutes of the Health System Reform Task Force,” Utah State Legislature, Health System
Reform Task Force (August 21, 2008).
[4] Senator
Wayne L. Niederhauser, Health System
Reform Task Force Meeting (September 18, 2008).
[5] David Clark,
“A Reasoned Approach to Health System Reform,” Utah State Legislature, Health System Reform Task Force, Background
(April 17, 2008).
[6] Health
System Reform, H.B. 133, State of Utah General Session (2008).
[8]
Disproportionate Share Hospital (DSH) programs allow the U.S. government to
provide special funding to hospitals that treat significant populations of
indigent patients.
[9] Nate
Checketts, “Proposed 1115 Waiver Amendments,” Utah State Legislature, Health System Reform Task Force, Item
Agenda 5 (August 21, 2008).
[PRINTER FRIENDLY VERSION]
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