Legislative Update: June 2016

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Legislative Update: June 2016

 

 

 

State Fairpark 

The Natural Resources, Agriculture, and Environment Interim Committee unanimously passed, on June 15th, a proposal to build a new 10,000 chair state-of-the-art multi-purpose arena at the Utah State Fairgrounds. The new facility will serve as the new home of the Days of ’47 Rodeo. It will also be utilized throughout the year to attract large events like the World Series of Barrel Racing, professional bull riding, community and cultural events, concerts and other sporting competitions.

The Church of Jesus Christ of Latter-day Saints pledged to contribute $3 million to help fund this project. Salt Lake City Mayor Jackie Biskupski and Salt Lake County Mayor Ben McAdams also committed to work with their Councils to help secure funding for the new facility. Additionally, there is interest from private donors, including Komatsu Equipment Picture1Company, O.C. Tanner, Zions Bank, Gardner Company, Vivint Home Solutions, Maverick and Questar, who pledge to contribute as much $1 million to the project. Some of the companies. If approved by the Legislature and signed by the governor, the state would appropriate $10 million from the general fund to pay for the remaining estimated $17 million that it will cost to build the new arena.

The State of Utah will own the arena, which is expected to generate at least $1 million in state revenue, and be managed by the newly-organized Utah State Fairpark Corporation Board of Directors. This project is aligned with the long-term vision previous outlined by Fairpark board.

“We were excited to see the support from stakeholders, legislators and private companies to expand the facility and grow Utah’s rodeo presence,” said Roger Beattie, State Fair Board Chairman. “Our goal is to start the demolition of the old arena and begin construction of the new arena this summer in order to host events the beginning of next summer.”

The fairgrounds are an important gem in our state. The renovation of the arena, which enjoys bipartisan support, will enable the fairpark to generate funds that will allow it to be more self-sustaining, as well as preserve the remaining historic structures. This arena is a long-term investment and is in the best interest of the state, fairgrounds and community.

 

Healthcare Costs

Consumers are quickly finding out that despite promises to the contrary, the Affordable Care Act (ACA) is driving up healthcare costs for everyone. Health insurance rates are up around the country, increasing far faster than inflation, and the middle class is being squeezed.

The ACA included a number of mechanisms that shifted, and intentionally or not, hid its actual costs during the first few years of operation. Two out of three of these provisions – reinsurance and risk corridors – expire this year. The reinsurance program required each insurer to pay a fee per enrollee, which would then be used to help offset costs incurred by high-cost enrollees in the individual market. The risk corridor program established an allowable range for losses and gains by requiring profitable insurers to turn over “excess” profits in order to give that money to less profitable insurers.

Many insurers have warned that 2017 is looking pretty grim, and according to Marilyn Tavenner, head of America’s Health Insurance Plans, the culmination of changes to the healthcare market that have occurred over the past several years will lead to a drastic rise in insurance rates on the ACA exchanges for 2017.

It’s important to note that increased monthly premiums are far from the entire story. In an attempt to keep insurance rates from spiking even more than they already have, insurers have narrowed networks and increased out-of-pocket costs, both with devastating effects for many consumers.

According to a Chicago Tribune editorial from late last year, “many consumers face rising deductibles of $4,000 or more, making out-of-pocket costs prohibitive and encouraging people to drop coverage . . .” and a study from 2015 showed that 25 percent of consumers with non-group insurance have problems affording healthcare and consequently, forgo needed care. In other words, budgets of healthcare consumers are so strained paying ever-escalating costs for mandatory health insurance with services many don’t want and don’t need, that they don’t have enough money left over to actually visit their doctor, receive recommended tests/treatment, fill their prescriptions, etc. Of those who were lower- to middle-income, nearly 33 percent skipped necessary care because the costs were prohibitive.

None of these problems were unexpected. Many warned that this federal intervention would make healthcare and health insurance less affordable, despite promises from the Obama administration that the typical family’s premium would be cut “by up to $2,500 a year.” Most understood that when you remove provisions limiting coverage of pre-existing conditions, thus incentivizing enrollment when health crises occur; expand the number of services and procedures that must be covered under every single plan, despite the needs of individual consumer; and charge the same for older, sicker enrollees as young, healthy enrollees, you’re going to end up with problems.

Utah has had a system that has worked well for many years. We enjoy some of the very lowest healthcare costs in the nation, and prior to the passage of the ACA, our state had already instituted a small business health insurance marketplace, Avenue H, and established a high-risk health insurance pool that made insurance more affordable for those with pre-existing conditions. Thanks to the federal health law, Utah no longer has the autonomy to make the necessary decisions that have for so long allowed for the lower costs and higher value that residents of our state have come to expect.

Although we are left with few options, we remain committed to working with stakeholders to find solutions to these complex issues. Among other things, the Legislative Health Reform Task Force continues to look for ways to innovate and to improve access, at a reasonable cost, for all of our residents. As it has done in the past, Utah will continue to lead the nation as we seek unique, Utah-specific solutions within this new healthcare landscape.