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Utah, HHS Quibble Over Best Way To Run State Insurance Market

The Obama administration says it is bending over backwards to help states carry out the federal health law. Utah’s top health insurance exchange official says the federal government could do more.

“There’s hasn’t been much dialogue,” said Patty Conner, director of the Utah Health Exchange, which recently rebranded itself Avenue H.

She hopes federal health officials will be more open to talking to her and other state officials about reconfiguring Utah’s three-year-old exchange to meet the requirements of the Affordable Care Act. “We are still talking and hope to have some substantial meetings in the coming weeks.”

Although the Obama administration conditionally approved Utah’s insurance exchange on Jan. 3, it’s unclear whether the state will make sufficient changes to win final approval. All states are required to set up an online insurance market, or exchange, for individuals and small employers to buy coverage starting in 2014. Enrollment in the exchanges is slated to begin Oct. 1. If a state doesn’t set one up, the federal government will do it for them. Utah is one of 17 states that have won conditional approval.

But unlike all but one other state (Massachusetts), Utah has been operating an insurance exchange for small employers since 2009 and has nearly 8,000 people enrolled. The U.S. Health and Human Services department has asked Utah to make certain changes including allowing individuals — not just small businesses — to buy insurance and hiring so-called “navigators” to help people enroll. Utah officials have agreed to do both, although they would like to continue using nonprofit and government organizations who already help with enrollment, rather than hire additional staff, Conner said.

The federal government also wants the Utah exchange to help enroll people into Medicaid if they qualify. Conner said the exchange plans to give users the option of applying for Medicaid when they go on the exchange website, but without the same computer platform that HHS wants.

Another point of dispute: Utah wants to give consumers the choice to apply for government subsidies through the exchange or Medicaid. The federal rules call for consumers to get denied by Medicaid first to qualify for the subsidies through the exchange.

Conner said Utah and the federal government have the same goals for the exchange, but prefer different ways to get there. She said there is a concern by some Utah lawmakers that if the federal government wants to “micromanage” the state exchange, they should simply allow the federal government to run it.

One example is HHS’s request that the state test the exchange for the federal government before winning final approval. Conner argues that’s unnecessary, because the state already has an incentive to make sure it works.

“We think we can do things with our exchange more efficiently, than following all the federal regulations, she said. HHS has given Utah until Feb. 1 to develop a revised timeline and a work plan that shows it will meet the federal  guidelines.

Obama administration officials did not respond to a request for comment.