That’s because federal regulations, part of the Affordable Care Act, mandate that states come up with a single basic plan in the individual and small-group markets. That plan will be available to anyone who buys insurance in the health benefits exchange, and any new individual or small-group product in the state.
“Originally, the federal government was going to come up with a single basic plan for all the states,” said George Lyford, health care attorney for the Colorado Law and Policy Center. “That would have made it easier to take coverage across state lines, to provide more uniform coverage nationally. But they changed their mind.”
That’s because states have different populations with different needs, he said. So the Department of Health and Human Services merely issued broad guidelines. By 2014, health insurance must cover ambulatory patient services, emergency services, hospitalization, mental health and substance abuse, prescription drugs, rehabilitative services, lab services, preventive and wellness care, and chronic disease management.
Colorado was left to decide which plan — one already in place in the state — best fit the requirements. The governor’s office, Division of Insurance and the Colorado Health Benefits Exchange launched a months-long program to identify the plans and determine which one would serve as a guideline for other carriers.
“It’s important to note that these are only the basic guidelines,” Lyford said. “Carriers can — and probably will — add more benefits. But this is a way to compare apples-to-apples and to make sure you know what you’re getting when you buy health insurance.”
Consumers will benefit from the standardization, he said.
“It makes it easier to know what you’re getting, that these basic things must be covered,” he said.
The state hasn’t yet chosen its benchmark plan, said Myung Oak Kim, spokeswoman for the Colorado Health Benefits Exchange. That’s the next step in the process. State officials spent the summer examining nine plans — three of the largest small-group plans, two state-employees plans, the largest HMO plan and three largest federal employee plans.
Then they hosted public discussion on which was best — and came up with a Kaiser Permanente plan that represents the state’s largest HMO plan. They compared United Choice Plus, Anthem’s Lumenos HSA, Kaiser’s plan A230, Kaiser’s state employee plan, United’s state employee plan, Blue Cross and Blue Shield’s standard and basic plans, and the GEHA standard plan.
“The Kaiser HMO plan isn’t ‘the’ plan,” explained Lyford. “The benefits available in that plan are the ones chosen to include in the overall state plan. It’s not a certification of a particular insurance company or a specific plan.”
In fact, Kim says there wasn’t much discrepancy among plans available in the state.
“More differences existed between the state and federal plans,” she said, “since the federal plans did not include state-required benefits or mandates.”
The recommendations do not include any pricing, premium shares or out-of-pocket costs, Lyford said. Negotiations about cost share and premiums will come in the future. The next step is to review comments by stakeholders about the minimum benefits plan and make a final selection. Health plans that include the new benefit package will be certified early next year, Kim said.
“This is just a discussion of what insurance companies will have to provide, at a very minimum,” he said. “And some of it was already being offered — but a few things, like mental health and rehab services, were maybe being offered at levels lower than what patients actually need.”
Recommending a comprehensive benefits plan is just the next step in the process to create Colorado’s Health Benefits Exchange. The exchanges will be marketplaces that allow people in the individual and small-group markets to compare coverage and select the right plan with more transparency.
Now that the Supreme Court has affirmed the Affordable Care Act, federal government subsidies will be available to people shopping in the exchange.
But Colorado’s exchange stands independent of the federal government and was created by Senate Bill 200 during the 2010 legislative session. The exchange is being set up as marketplaces for consumers and small businesses to purchase health insurance, modeled after a similar program already in place in Utah.
Colorado’s exchange works like this: Beginning October 2013, businesses with fewer than 25 employees making less than $50,000 a year will be able to gain access to insurance companies wanting to sell them policies. They’ll receive up to 50 percent of their premiums back on federal income taxes, starting in 2014 when the plans go into effect. Nonprofit organizations will get a 35 percent premium refund.
“We are working hard to build a new health insurance marketplace that meets the needs of Colorado,” Kim said. “We are focused on building a web-based marketplace that provides a high-quality shopping experience, accompanied by effective customer service programs. … We are also planning an aggressive public education campaign to get the word out about the exchange and encourage Coloradans to come to us next October to shop for health insurance.”
Once the health plans are certified by the state, the Department of Health and Human Services will rate each plan based on benefits, premium costs, payment policies, enrollment, claim-denial rates and financial soundness of the company — allowing consumers to decide for themselves which company they want to choose.
Small businesses should be excited about the exchange, said Tony Gagliardi, executive director of the National Federation of Independent Business in Colorado.
“For them, it’s about price, competition, clarity,” he said. “That’s what most of our members see. It also gives them a chance to stop tying employment to health insurance. They can give their employees ‘x’ amount of dollars and the employees can go to the exchange.”