Nothing Ventured, Nothing Ventured: The Legislature and Health Insurance
You know how dinner conversations go. Podcast recommendations and movie discussions only take you so far before talk inevitably turns to the day’s hot new developments in state health insurance regulations.
No? Okay, I’ll admit — even in health policy wonk circles, this isn’t a topic that lights up a room.
But if 2017 was health policy’s year of rethinking Medicaid, 2018 has focused instead on Colorado’s role in commercial health insurance. A number of bills were introduced this legislative session that tackle specific issues in the private market.
The question is: Do any of them have teeth? After all, nothing ventured, nothing gained.
Financial Assistance
One of the more notable private insurance proposals this year is House Bill 1205, which would offer financial assistance to some Coloradans buying health coverage on Connect for Health Colorado in high-cost areas the next two years. Currently, the Affordable Care Act offers subsidized coverage to people with incomes below 400 percent of the federal poverty level. HB 1205 would allow additional Coloradans to qualify for financial assistance if they:
- Live in one of three most costly rating areas,
- Have a household income between 400 and 500 percent of the federal poverty level, and
- Spend at least 20 percent of their income on health insurance premiums.
If that sounds like a niche market, that’s because it is. A CHI analysis provided to legislators showed that about 3,900 Coloradans would be eligible for financial assistance under the bill. Of those, only about 2,400 are likely to use the benefit, according to the legislature’s fiscal note — 0.04 percent of Colorado’s population.
But those who will benefit are the people have suffered the most from steep insurance price increases, and they say they are increasingly forced to choose between insurance coverage and obligations such as paying their mortgage. As one representative from Colorado Counties Inc. put it during her testimony in support of the legislation, “This bill is not the fix, this is a temporary band-aid . . . but the families that would benefit are living on the edge.”
HB 1205 is currently under consideration.
Catastrophic Plans
Meanwhile, Senate Bill 132 tackles rising costs on the individual market from another angle. The bill – which is nearly to the finish line and benefited from bipartisan sponsorship – would allow health insurers to offer catastrophic plans to state residents.
Catastrophic health insurance plans do not cover primary care or screenings but kick in for emergencies and other high-cost medical procedures. They are more akin to other types of insurance, such as car insurance. Car insurance does not traditionally cover routine care such as oil changes, but exists to help the insured person in case of an accident.
SB 132 would allow Colorado to circumvent the Affordable Care Act requirement that plans cover a minimum of 10 essential health benefits, including primary and preventive care. Less comprehensive plans could mean less expensive options available to more Coloradans. However, the proposal may not significantly move the needle on uninsured rates. Coloradans under 30 can already buy catastrophic plans on the state exchange, but only five percent of these young customers choose the option.
More Bills
Other bills targeting insurance regulations are even more specific. SB 130, which failed in its first House committee hearing, would have repealed a standing requirement that insurers report data on 25 average inpatient reimbursement rates to the Division of Insurance.
Another proposal, SB 237, would have addressed charges for out-of-network emergency care and notifications for other out-of-network services. While key to avoiding some surprise bills, much of this language already exists in statute. If passed, SB 237 would have essentially served to clarify existing law — a good step in the eyes of many, but not a major policy change. The bill failed to gain any Republican support in the Senate health committee.
And in HB 1311, an old idea was new again. HB 1311, which would have established a single geographic rating region for the state, would bar individual market insurers from charging Coloradans in some counties more than others. This would lower premiums in rural areas of the state, but it would make insurance more expensive along the Front Range. It would not include any long-term solutions to growing health care costs and faced an uphill battle to passage. Sponsors asked for the bill to be killed in its first committee hearing, seemingly throwing their weight behind other proposals that they thought could fare better.
In short, many of these bills may do little to address growing costs, a disjointed system, unequal access and other large problems facing health care today. A major reason for this isn’t the weakness of the ideas themselves, but their relatively small reach. Fewer than one of three private health insurance plans actually fall under state regulation, putting a hard ceiling on the impact of these regulatory changes.
Still, I hope this insight into the fascinating world of insurance regulation gives you material for dinner party conversations. Game of Thrones won’t be back until 2019.
Find Emily Johnson on Twitter: @CHI_EmilyJ
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