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Utah Legislature: Utah health reform bills moving forward

SALT LAKE CITY — Two bills that in effect change the game in the middle of the rules governing how medical care is paid for by most working Utahns are a step away from becoming law following a committee approval Monday.

HB294 easily the most complex bill introduced this session, is now in the Senate's hands. SB39, probably the shortest bill this session, requires insurers who require preauthorization to provide a statement that a medical procedure covered under the plan if a plan member in good standing requests it.

The statement is not a commitment that the insurer pay for the procedure in question, only that it is a covered benefit of the plan, said SB39 House sponsor Rep. Merlynn Newbold, R-South Jordan.

The bill, which passed 28-1 in the Senate last week, is barely 41 lines long, is the runt of the litter of health care reform proposals that average 400 times that size.

But bills that do the most good are the often the shortest, Newbold told members of the House Health and Human Services Committee.

It addresses an issue that adds big knots in the medical billing process, proponents of the measure said.

The bill isn't an attempt to gang up on insurance companies, which an industry lobbyist said Monday are becoming the scapegoat of the health care cost crisis, but a bill to help "people become a partner in their own health care," said committee member Rep. Trisha Beck, D-Sandy.

SB294 isn't either, said sponsor and House Speaker Rep. David Clark, R-Santa Clara, "but it does level the playing field" for companies who want to be part of the new online health care exchange, now in its second trial run. The exchange is to eventually offer an alternative marketplace for privately insured Utahns to review alternative insurance plans other than the one offered through their workplace, where more than 70 percent of working Utahns get insurance.

HB294, which received passed the House 62-13 last week, adds oversight to the industry that will prevent them "gaming" the system by in effect skewing risks in their favor instead of sharing as equally as possible.

Adding the risk adjuster is common in the business and monitors actual risk so that one company isn't benefitting from taking more low-risk members at the cost of another who is accepting higher-risk individuals or those with chronic or known serious health problems.

The adjuster was objected to in previous committee hearings and in House floor debate because some said it smacked of government imposing itself on business and runs completely counter to a reform effort that supposedly hinges on private market innovation. Clark promised if insurance companies do what they have said as far as dividing the risk between now and January 2013, he will ask that position be eliminated.

Because the exchange is such a paradigm shift to the insurance market, insurance companies have been skeptical about reform, and have said Utah's effort and the one in Congress claim to be motivated by getting health care costs under control but at the same time only seems to be targeting the insurance industry premium prices.

"Premium prices keep going up because the cost of medical care keeps going up," Kelly Atkinson, a lobbyist for Utah health insurance companies, said Monday.

Atkinson, a former legislator, said the insurance industry is "universally hated" by the public, a ranking, he joked, "that puts insurers a little above politicians." He said although Clark claims as a point of pride that there are no mandates in his bill, there is one for insurers, at least the side effect that will feel like one to the small insurance companies.

"The new regulations will hurt the smaller carriers and help the large ones who don't need it," Atkinson said, noting that Utah already has the lowest premium prices in the country. He said insurers support the system becoming more transparent and making individuals more engaged in their health care and insurance choices. He urged Clark and others involved in state reform effort to look at other major cost contributors as they tackle the cost of health care, such as the price of prescription drugs and the profit margins of companies that make them.

Clark said that has been the plan all along, but that invitations to drug makers to participate have gone largely unanswered.

In order for reform to move forward, the platform of the private insurance market must be stable, Clark said, noting that the trial period of the exchange to show where the kinks are and to get them worked out while businesses have time to adjust their operations to the new consumer-oriented reality in health care.

The way insurance companies factor in risk or adjust the slope of their business models does involve uncertainty, and how they arrive at those numbers is what Clark calls "the special sauce" secret recipe of the industry.

He said there are no guarantees and there are also no mandates on consumers or insurance companies or business owners. There is the application of "correct principles" of the free market that will induce consumers to take a more active roll in what health care coverage they get "other than just saying yes or no to whatever their employer is offering."

See the bills at le.utah.gov/~2010/htmdoc/hbillhtm/HB0294.htm and le.state.ut.us/~2010/htmdoc/sbillhtm/SB0039.htm

e-mail: jthalman@desnews.com