State Update

U.S. Department of Health and Human Services Approves Utah’s Health Exchange Model

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In a letter dated December 14, 2012, Gov. Gary Herbert (R-UT) requested that the U.S. Department of Health and Human Services (HHS or agency) certify Utah’s proposed health insurance exchange (also called a marketplace) as Affordable Care Act compliant. The initial plan allowed Utah to continue developing its consumer-focused online tools related to health insurance coverage for Medicaid enrollees and employees of small businesses. On January 3, HHS provided conditional approval for Utah to operate a state-based exchange.

Since then, Utah and HHS have engaged in numerous discussions related to the conditions of that initial state-based exchange approval. As a result, Utah’s new marketplace model bifurcates the Small Business Health Options Program (SHOP) component from the individual exchange. The model essentially allows Utah to operate a state-based SHOP-only marketplace. Specifically, Utah will run its own health exchange, Avenue H, as the certified SHOP exchange in the state; it will have sole oversight of qualified health plans, including certification and compliance; and it will make the final determination of Medicaid and Children’s Health Insurance Program (CHIP) eligibility. 

In a letter dated May 9, Gov. Herbert expressed his continued support and commitment to operating the new model and included in his letter a synopsis of the proposed bifurcated marketplace. On May 10, HHS responded to the governor via letter stating that the agency is “pleased to have reached a common understanding” of the proposed marketplace. In addition, the agency noted that it intends to propose an amendment to its Exchanges Final Rule (45 CFR 155) permitting Utah to operate a state-based SHOP-only marketplace. Additionally, in a guidance document issued by HHS on May 10, the agency expressed its intent to draft rules related to operating a SHOP-only marketplace, including providing a clear application process for other states wishing to operate that type of marketplace.