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Utah to operate its own SHOP, have federally-facilitated individual exchange under deal with federal government

Early this year, Utah received conditional approval to operate a state-based health insurance exchange marketplace from the federal government.  The approval was somewhat surprising given the state’s insistence on operating only what amounted to a scaled down, online Small Business Health Options Program (SHOP) that it put in place before the 2010 enactment of the federal Patient Protection and Affordable Care Act.  Utah’s Avenue H wouldn’t have met federal exchange requirements, primarily because it didn’t offer plans for individuals.  The likely outcome would have been disapproval of Utah’s state-based exchange status and the feds taking over Utah’s exchange.

Under the terms of an agreement between the state and the federal government reported today by The Salt Lake Tribune, the feds will run the Utah’s individual exchange marketplace while the state will operate Avenue H as a state-run SHOP exchange.  Avenue H will operate “without a competing SHOP exchange or interjection by the federal government” Gov. Gary R. Herbert wrote in a May 9, 2013 letter to U.S. Health and Human Services Secretary Kathleen Sebelius conveying his understanding of the deal.

The newspaper notes if the deal is approved as expected this week, Utah would be the only state exchange operating under such an arrangement:

The agreement is unique to Utah and essentially opens up a fourth alternative for operating the federally-mandated exchanges. Previously states had only three choices — a state-run exchange, a federally-run one, or a state-federal partnership exchange

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