Utah Gov. Jon Huntsman (R) has signed into law several bills overhauling the state’s health care system by expanding state-level health insurance bureaucracy, imposing employer-sponsored insurance mandates, and reforming medical malpractice procedures.
At the core of the state health care overhaul is House Bill 188, which expands the state’s “NetCare” health insurance program.
NetCare was originally designed as a low-cost alternative to other private insurance or COBRA for Utah residents between jobs. HB 188 expands eligibility to additional individuals and small group pools.
Lawmakers say insurers will be able to use NetCare to offer health insurance at one-half to one-third of the cost of the average large-group health plan. The reduced prices of policies purchased under the program are a result of some state-mandated treatment coverages being waived for policyholders who don’t need or want them.
Proponents also say the existence of NetCare will create flexibility in the insurance market so individuals and small group pools can obtain reasonably priced plans.
HB 188 creates a “defined contribution market” allowing families to combine their premium payments from different employer-sponsored plans to purchase one family insurance plan through the NetCare market.
Beverly Gossage, an expert in health savings accounts and health retirement accounts who has addressed Utah’s health care task force on this subject, has doubts about the effectiveness of the NetCare model. She said, “The real concern is not the cost of plans compared to the average large-group plans but the cost compared to individual policies that are already available.”
Extra Bureaucracy Not Needed
“Many of the objectives of NetCare could be met without creating another taxpayer-funded bureaucracy to administer it,” Gossage added.
Highly worrisome is the requirement for insurance companies to cover all individuals regardless of preexisting conditions, according to Gossage. “This is what drives the price of insurance up for everyone,” she said.
“Overall, this NetCare expansion is just more unnecessary government bureaucracy,” Gossage added. “It’s not a prudent way for states to address health care issues. A better approach is to allow employees and employers to contribute to individual policies through a la carte ‘cafeteria’ plans while exempting them from state mandates.”
‘Backdoor’ Employer Mandate
Another new law, HB 331, creates an employer mandate requiring general contractors and contractors who work on construction projects with state departments and public transit districts to provide employees with health insurance if the project is worth $1.5 million or more. It also requires subcontractors to provide insurance if their projects are worth $750,000 or more.
The new law “is a back-door attempt to achieve an onerous employer health spending mandate in Utah,” said Christie Herrera, director of the health and human services task force at the American Legislative Exchange Council (ALEC). “Due to the fact that such a mandate requires companies to spend a certain percentage of their payroll, not their revenue, on health benefits, a company cannot cover the costs by increasing prices, which is the normal way increased costs are covered.”
In addition, said Herrera, the law “won’t cover the uninsured or lower the cost of health care for Utah residents. House Bill 331 does not address individual or small-group reforms that would improve access to care, and it completely ignores market-based approaches, such as expanding health savings accounts or reducing mandated benefits, that would actually drive down health care costs.
“Enacting a mandate like this will come at the expense of jobs, economic development, and health care affordability,” Herrera added.
Beneficial Malpractice Reform
The final measure signed into law this session is Senate Bill 79, which provides for medical legal reform. It changes the level of evidence plaintiffs must provide for emergency department-related medical malpractice claims, bars witnesses from receiving contingency fees, and gives the state’s licensing laws greater oversight of out-of-state medical expert witnesses.
“The clear and convincing evidence standard is a widely used one,” said Amy Kjose, director of the civil justice task force at ALEC. “Particularly in medical malpractice cases, it is important to admit only evidence that clearly supports your claim, so as to avoid frivolously penalizing doctors. I truly believe that doctors and patients will benefit from this change.”
Kjose believes the contingency fee measure is likewise a step in the right direction.
“Making sure the witness has no reliance upon the outcome of the case in order to get paid removes any improper incentives that could affect the information presented by the witness,” Kjose said.
For more information …
Senate Bill 79: http://le.utah.gov/~2009/htmdoc/sbillhtm/SB0079S03.htm
House Bill 188: http://le.utah.gov/~2009/bills/hbillenr/hb0188.htm
House Bill 331: http://le.utah.gov/~2009/bills/hbillenr/hb0331.htm