SALT LAKE CITY (AP) — The federal government on Thursday approved the key elements of Utah's existing health insurance exchange as compliant with the requirements of the new federal health care law.
With the announcement, Utah officials cleared a major hurdle on the way to developing a plan that Gov. Gary Herbert says can become a model for the rest of the nation.
Utah's existing exchange, launched in 2009, allows small businesses to select health care plans in an online marketplace that lists several options and prices, similar to websites that sell airline tickets.
A sticking point in receiving federal approval was whether the state would extend the exchanges to offer plans to individuals, as required by the Affordable Care Act. The state submitted a plan that provides for that change, but otherwise leaves much of the existing blueprint in place.
The approval was granted on the condition that officials comply with all federal regulations, said Department of Health and Human Services spokesman Gary Cohen.
"There are a number of steps Utah needs to take to expand individual marketplace and otherwise comply with provisions," Cohen said.
In addition to creating a marketplace for individual insurance, Utah must develop a navigation component that helps people find information and get enrolled, Cohen said during a conference call with reporters.
Herbert's office said the announcement doesn't change anything about Utah's plan moving forward, adding that Utah's exchange was consumer-driven, market-based and flexible, factors that make it the "right fit" for the state.
"Of course we'll review the HHS announcement and determine if the conditions are acceptable or reasonable for our state exchange — and that includes sitting down with legislators," said Ally Isom, Herbert's deputy chief of staff. "But there is nothing about Utah's path that changes as a result of today's announcement."
Utah was one of four states led by Republican governors to get approvals Thursday from HHS Secretary Kathleen Sebelius. The others were Idaho, New Mexico and Nevada.
In all, 17 states plus Washington, D.C., have been cleared to run their own insurance exchanges.
Two states have received approval to run joint federal-state exchanges.
At least nine other states are considering federal partnerships. Such states face a Feb. 15 deadline to apply.
Washington officials will set up insurance markets in states that chose against participating, as at least 19 Republican governors have indicated.
The federal announcement Thursday comes as open enrollment for millions of uninsured Americans is less than 10 months away — Oct. 1.
Utah officials will have some significant work ahead to make sure the marketplace conforms to federal rules, said Jennifer Tolbert, director of state health reform at the nonpartisan Kaiser Family Foundation. Creating the navigation component in particular will be time-consuming, she said.
"It will be a heavy lift for the state," Tolbert said. "But they have the infrastructure for the exchange up and running already. They will able to build on that."
Herbert last month announced his plan to submit the state's existing exchange for federal approval, saying he found several problems with federal plans and that he preferred a state-based approach to stay true to "Utah principles."
Also, in a letter to President Barack Obama on Dec. 10, the governor wrote that he wanted "the Utah exchange to survive and thrive as we originally envisioned it."
"In fact, I hope it becomes a model for other states," he added.
Utah, along with Massachusetts, pioneered online health insurance marketplaces designed to reduce confusion and anxiety for individuals, families and businesses purchasing health care coverage.
They are meant to have the feel of an online travel site, such as an Expedia or Orbitz.
Under the health care law, which Obama signed in 2010, about 8 in 10 customers in the new marketplaces will be eligible for federal aid to help pay their premiums.
Small businesses will have separate access to their own exchanges.
Utah officials have said they plan to have the individual marketplace up and running by Jan. 1, 2014, when coverage would take effect.
Associated Press writer Ricardo Alonso-Zaldivar in Washington contributed to this report.