The Colorado Division of Insurance (DOI) is now seeking public comments on their preliminary draft of the emergency rules and regulations concerning the Colorado Option standardized health benefit plans for the individual and small group markets. The public comment period ends Oct. 20 at 5pm.
Amanda Massey, executive director of the Colorado Association of Health Plans, says the draft is too early in the process for health plans to prepare for these new benchmarks and the DOI still has many outstanding questions to answer that might affect health plans’ ability to reduce premiums, as the Colorado Option bill requires.
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In June 2021, House Bill 1232 — the Colorado Option bill — became law, requiring the DOI to establish a standardized health benefit plan before Jan 1, 2022, aimed at improving access and affordability for consumers. Health plans will be required to offer the DOI’s standardized health plan to consumers with premiums that are at least 5% less than the plan’s 2021 premium rate by Jan. 1, 2023.
If the plans don’t meet this threshold, they will face a DOI hearing and potentially be required to comply with DOI-established reimbursement rates for hospitals and providers.
The draft includes bronze, silver, and gold plan designs. Here are some of the drafted projections for these plans created by DOI.
“AV” stands for actuarial value, which means the “percentage of total average costs for covered benefits that a plan will cover, with calculations based on the provision of essential health benefits to a standard population.”
The draft says the standardized metal tier plans must cover a minimum of three behavioral health visits, three physical care visits, and three prenatal care and preconceptions visits without copays, deductibles, or coinsurance.
It also outlines the five drug tiers carrier formularies must include, while allowing copay-only cost sharing: preventative care drugs, generic drugs, preferred brand drugs, non-preferred brand drugs, and specialty drugs.
This draft plan was released a week before the Centers for Medicare & Medicaid Services (CMS)’s approval of the Colorado benchmark health insurance plan, which expanded essential health benefits (EHB) for small group and individual market plans. Massey says those additional EHBs need to be evaluated and remains concerned about health plans’ ability to pay for them. She says:
“As the DOI factors in all of these benefits and actuarial values, we still are very concerned about the ability to actually meet these premium reduction targets that were promised by the proponents of the [Colorado Option] bill.”
Massey is also concerned with the compressed timeline for the implementation of the standardized plans. She says health plans cannot meaningfully prepare until it is clear what will need to be included in the plan. The timeline is short, with health plans needing to reduce their premiums by 2023, she said.
“This is a very condensed timeline for rolling out the standardized plan for 2023. We know that the DOI wants to have everything ready in order to submit the 1332 waiver [request] by November 30 of this year.”
Massey says “the math needs to add up” for actuarial values since they have to be met for each tier under federal rules.
Massey will speak more about the future of the public option for health plans at our upcoming 2021 Colorado State of Reform Health Policy Conference on Oct. 20.
She will be speaking on our “What is next for Colorado’s Public Option?” panel with Rep. Dylan Roberts, one of the sponsors of HB 1232, Kyle Brown, DOI’s deputy insurance commissioner, and Leah Hole-Marshall, general counsel and chief strategist at the Washington Health Benefit Exchange. You can register here.