Healthcare
3:55 pm
Mon November 19, 2012

Herbert Sends Letter to Sebelius: Wants Answers on Health Exchanges

Hear the full report.

Governor Gary Herbert sent a letter Monday morning to U.S. Department of Health and Human Services Secretary Kathleen Sebelius.  The letter declares the Governor’s intentions to continue to pursue Utah’s state-based health insurance exchange – known as Avenue H, rather than a federally-designed exchange.  But the letter also says that this decision could change as the state receives more information. 

Enclosed with Governor Gary Herbert’s letter is a list of top ten unanswered questions about federal exchanges. 

“We have a whole long list of unanswered questions about what a federal exchange would mean for Utah,” said Norman Thurston, the Governor’s Health Reform Implementation Coordinator, “How much added cost would a federal exchange add on to our system?  How much would they want to collect from our consumers, our business community?  Would they charge the state?”

Also on the list are questions about control.  For instance, would state policy makers be able to influence key operational decisions?  The letter states that the Governor will make a final decision based on how HHS answers these and other questions.  The new deadline for states to declare their intentions on health exchanges is December 14th.

GOVERNOR GARY HERBERT'S LETTER:

November 19, 2012

Kathleen Sebelius
Secretary
U.S. Department of Health and Human Services
200 Independence Avenue, S.W. Washington, D.C. 20201

Dear Secretary Sebelius,

I remain firmly convinced that meaningful healthcare reform is most effective when developed and implemented at the state level. As you are aware, since long before the passage of the Patient Protection and Affordable Care Act, the State of Utah has operated a health insurance exchange, part of a larger state healthcare reform initiative. Secretary, because I fervently intend to move forward in the best interests of Utahns and their families, I will continue to pursue all of Utah’s state-based reforms, including our version of an exchange based on defined contribution, consumer choice, and free markets.

While I appreciate the extension of the federal deadline for states to determine an appropriate course regarding an insurance exchange, there remain far too many unanswered questions about the federal alternative. In fact, I have attached the ten most critical questions from Utah’s perspective. In light of these and numerous other uncertainties, making any reasoned determination about the future of Utah’s exchange or a federal exchange is virtually impossible; more time without answers accomplishes nothing. Ultimately, I will have to make a final decision based on how your answers to these and other critical questions impact Utah’s budgets and markets.

Secretary, as a former governor yourself, surely you understand my earnest desire to
make decisions in my state’s best interest based on solid data and facts. That has never held more true than in the realm of healthcare reform. Without answers, it will be impossible to determine the best outcome for Utah’s taxpayers, families, and small businesses.

In addition to the need for more information, I hope you can appreciate my desire to consult with the Utah State Legislature. They also have vested interest and I anticipate that proper implementation of either option will require changes in state statute. However, our legislature does not meet again in regular session until January 2013.

Given these factors, the best course for Utah is to preserve all options and flexibility for state policy makers. However, while I presently intend to maintain course with Utah’s version of a health insurance exchange, this decision could change as we receive more information and answers to critical questions.

I look forward to your prompt response to these important questions.

Sincerely,

Gary R. Herbert, Governor State of Utah

................................

ALSO INCLUDED WITH LETTER:

Top Ten Unanswered Questions About Federal Exchanges

1. How much will it cost the state to participate in a Federal Exchange, including the government, taxpayers, and the private sector? Who will set the user fee and what will those be? Are there any other assessments planned? If the Federal Exchange is not self-sustaining, how do they intend to make up the lack of funds?

2. If a state chooses to provide some services to the Federal Exchange (such as reinsurance), how will we be reimbursed for those administrative costs?

3. Under a Federal Exchange, will state policy makers be allowed to give advice or information, and influence key operational decisions? How will that happen?

4. What is the process to ensure that a Federal Exchange accurately incorporates all state-specific procedures and laws?

5. Under a Federal Exchange, what restrictions or limitations will there be on a state regulator's authority to enforce state laws? Will we retain our ability to take actions to protect consumers? How can we ensure that multi-state plans compete on a level playing field and are compliant with state laws? How will the Federal Exchange promote the viability and stability of our insurance markets?

6. How will HHS work with Utah's private sector stakeholders, such as consumers, providers, insurers, employers, etc. to make sure that the Federal Exchange takes into account and meets their needs? How will the Federal Exchange provide consumer assistance in a way that takes into account Utah-specific information? Will customer support personnel be familiar with Utah's markets and appropriately licensed to advise consumers?

7. How will a Federal Exchange determine how many and what type of Navigators to have for Utah? How much extra cost will that program add to the system? Who will monitor the Navigators to prevent fraud, waste, and abuse?

8. We responded to the deadline on Essential Health Benefits in September, but we still don't have final guidance on essential health benefits, actuarial value, and rating, which our insurance companies need to be able to start preparing plans and prices. When will we have final rules so insurers can start plan development?

9. What are the procedural, technical, and architectural requirements for our existing systems to link to the Federal Exchange? Will the Federal Exchange require a full Medicaid denial for every family that wants to get a premium tax credit? Can we automate the denial process to reduce work load on our Medicaid program? What type of data package will be sent to the Utah Medicaid system? Will that information be customized so we don't have to manually process every application? What information is the Federal Exchange expecting to receive back from our system and what is the time frame required for us to respond?

10. How will the Federal Exchange present consumers with their options? Will they be able to see all of their options and make a choice, or will the Federal Exchange only show them the option that has been determined to be “best” for them? What about people who are technically eligible but may wish to purchase private insurance? Will the Federal Exchange “push” people to Medicaid? How will the Federal Exchange handle appeals by people who disagree with their premium tax credit amounts?