As I've explained before, Section 1332 of the ACA itself gives individual states the right to petition to make changes in how the law works in their state. The idea is that, as President Obama noted himself, if a state can come up with ways to make the ACA provide coverage which is at least as comprehensive to at least as many people as it already does, without increasing the federal deficit, go for it.
There've been a couple dozen 1332 waivers which have made it at least partway through the development process; some failed along the way, some were completed but then rejected by CMS, and some have been approved. The most common type of approved 1332 waiver, in nearly a dozen states now, is for reinsurance, which is a wonky way of leveraging state dollars to reduce premiums for unsubsidized ACA enrollees.
If you're wondering why you've only heard about "reinsurance waivers" over the past year or two, there's two reasons.
Polis Administration Projects 18.2% Average Decrease in Premiums for Individual Health Insurance Plans in 2020
Reducing health care costs has been a top priority for Polis.
DENVER (July 16, 2019) – Today, the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), announced that for the first time ever, Colorado health insurance companies that sell individual plans (for people who do not get their health insurance from an employer or government program) expect to reduce premiums by an average of 18.2 percent (-18.2%) over their 2019 premiums, provided the reinsurance program is approved by the federal government. These are the health insurance plans available on the Connect for Health Insurance Exchange, the state’s health exchange made possible by the Affordable Care Act (ACA).
As I noted the other day, some of my blog posts don't have any insight to add, they're purely for aggregating data points. This is one of those posts.
Here's the Connect for Health Colorado May enrollment dashboard report. It doesn't provide much detail, and it's kind of fuzzy/hard to read, but I do like the way it shows both QHP selections (that is, how many people selected exchange policies) as well as effectuated enrollments from month to month.
Remember, around 10% of those who select plans never end up actually paying the first month's premium, and are thus never actually enrolled...and there's some amount of churn after that as people drop their coverage mid-year and new people enroll via Special Enrollment Periods. Then the whole process starts over again the following January.
As a result, you see a gradual divergence between QHP selections increasing and effectuated enrollments decreasing throughout the year...only to reset in January of the next year.
When I first watched the video, I got hung up on a different aspect of Alec Smith's story...the question of whether or not he would have qualified for tax credits via an ACA exchange policy based on his income. I reached out to Alec Smith's mother, Nicole Smith-Holt, to clarify a few things from her story, but hadn't heard back yet as of yesterday morning...and made a poor decision to post the article yesterday anyway, in which I speculated, based on the limited information in the video, that Alec may have qualified for some level of assistance after all without realizing it.
The whole post was, quite simply, wrong. It was wrong for several reasons, and I'm sorry for each of them.
I laid out several of the obvious ways in which my original post was out of line, thoughtless and showed a lack of compassion. I apologized personally to Ms. Smith-Holt, she accepted, and we had a lengthy online discussion about her son's story and what led to his death:
DENVER – Coloradans shopping for health insurance through Connect for Health Colorado can now preview health plans and estimate costs on their mobile devices and tablets using the award-winning Quick Cost and Plan Finder tool.
Connect for Health Colorado has optimized the tool for mobile browsing of health insurance plans as part of its technology modernization effort, which includes a suite of tools such as live chat and scheduling a call. Development is also underway to optimize the complete application for mobile devices. Making the technology consistently mobile provides a smoother user experience and supports customers who do not have immediate access to traditional desktops and laptops.
Colorado's Senate advanced another piece of Democratic Gov. Jared Polis' health care agenda on Tuesday by tentatively endorsing a study on creating a state-run health insurance option.
The bill would direct state agencies to recommend a plan that would compete with existing private insurance plans and those offered on Colorado's health care exchange. Another Senate vote sends the study bill to the governor. It's already cleared the House on a bipartisan 46-17 vote.
On the surface, this sounds pretty much like the state-level Public Option bill which has quietly been rushed through the Washington State legislature over the past few weeks. Unlike the Washington bill, however, it looks like the Colorado legislature is covering a few more bases...particularly funding:
A couple of weeks ago I reported that the Colorado legislature was moving on an ACA reinsurance bill which, on the surface would seem to be similar to other reinsurance programs implemented in over a half-dozen other states to cut down on individual market premiums. The Colorado bill, however, had an unusual funding mechanism:
While similar programs have gone into effect in a number of states, Colorado’s funding mechanism for reinsurance would be an innovative approach. This mechanism utilizes Medicare reference-based pricing to bring down health care costs (what is paid to hospitals and doctors). Medicare-reference-based pricing means that the hospitals, doctors and other healthcare providers would be paid a percentage of what Medicare would pay. For example, the program may pay 150 percent (or 1.5 times) of what Medicare would pay for services, which would be less than what is currently paid to healthcare providers. That savings is then passed on to consumers in the form of lower premiums.
Back in January I reported that the state of Colorado is joining several other states in cracking down on non-ACA compliant so-called "Short-Term, Limited Duration" healthcare policies. As of April 1st, STLDs:
Can last no longer than 6 months/year (still longer than the 3-mo limit under Obama)
Have to stick to the ACA's 3:1 age band limit on premiums
Must be guaranteed issue (no more medical underwriting)
They can still exclude coverage of pre-existing conditions, but there's a limit of 12 months on the lookback timeframe
Must cover all 10 of the ACA's Essential Health Benefits
Must follow other ACA community rating requirements (limiting variances to age, tobacco use and geographic area)
A minimum Medical Loss Ratio of 80% to match the ACA's MLR (currently CO only requires a 60% MLF)
In other words, Colorado just made STLDs follow most of the same rules as ACA-compliant policies.
A couple of weeks ago, I noted that Colorado is joining over a half-dozen other states in moving forward with their own ACA reinsurance program 1332 waiver request. At the time, I was a bit vague as to just how much the program, if approved, would actually lower unsubsidized premiums, especially since the wording of the bill differentiates between different rating areas:
The Commissioner shall set the payment parameters at amounts to achieve:
Via Email from the Connect for Health Colorado exchange...
Customers Receiving Financial Help Through Connect for Health Colorado® Seeing a 14% Drop in Net Monthly Premium Cost
DENVER – Coloradans who get financial help buying health insurance through Connect for Health Colorado® are paying an average 14 percent less in “net premium” – what they pay after assistance – compared to the average net premium in 2018, according to data released today.
Three of every four current Connect for Health Colorado customers qualify for financial help to reduce the monthly cost of health insurance. The average net premium for those Coloradans is $117 per month, down from $136 per month last year.
“We are happy that we are able to make health insurance affordable for so many people,” said Kevin Patterson, Chief Executive Office of Connect for Health Colorado. “The number of our customers receiving help rose this year by seven percentage points, to 76 percent, an important increase. We know we have more work to do, and are committed to expanding our impact as we work with policy makers, our stakeholders and our customers throughout the state.
