Utah Senate approves task force to study integrated health system; may require divestiture in future

The Utah Senate on Feb. 17 advanced Fourth Substitute Senate Bill 61, directing a legislative task force to study integrated health systems and charging it with evaluating possible divestiture or other remedies for subsidiaries that compete with taxable insurers. The measure, sponsored on the floor by the bill’s floor manager, passed by roll call and will be read for a third time.

Supporters said the bill responds to concerns that Intermountain Health Care (IHC) and similar vertically integrated systems enjoy tax and structural advantages that may distort competition. Sponsor (identified in the transcript as the bill manager) told the Senate the fourth substitute removes a proposed gross-receipts tax and instead establishes a task force, with funding for independent consultants and actuaries, to examine whether the nonprofit umbrella should continue to shelter subsidiaries that operate as for-profit insurers and businesses.

"The task force will call in experts and do actuarial studies," the sponsor said, arguing the panel would produce the facts the Legislature needs. Senator Thomas, who described his background with county prosecutions and tax cases, cited the Office of Legislative Research reports showing differences in charity-care percentages across providers and said the matter is a public-policy question the Legislature should resolve rather than leave to courts or administrative interpretation.

Opponents warned the statutory timeline for any divestiture could be harmful. Senator Bell said he had spoken with IHC’s CEO, who pledged to participate in the task force and to open records, but warned that a statutory divestiture date could stigmatize the plan and depress its market value. "If we have as a matter of law that the plan will be divested, employers and customers will feel very insecure about using IHC," Bell said on the floor.

Another critic urged removing mandatory divestiture language and limiting the bill to a study-only approach, calling the proposed divestiture a "hammer" that presupposes an outcome. Supporters countered that past study without a legislative trigger had produced limited change and said the compromise fourth substitute provided adequate time and review: the enacted timeline gives the Legislature multiple sessions to consider task-force findings and to act before any statutory divestiture would take effect.

Senators debated specific financial figures and charity-care metrics during floor discussion. The sponsor and supporters said the substitute retained divestiture as an option in part to ensure the task force and future legislatures have leverage to secure data and cooperation, while opponents said that leverage could become a premature judgment about the company’s conduct.

The bill text as approved on the floor creates the task force, allocates funding for consultants, and preserves an option for divestiture that would not take effect until a future date spelled out in the statute. The Senate vote to advance the fourth substitute was 18 yeas, 8 nays, with 3 absent; sponsors said the measure will go forward for final consideration after required readings.