Colorado became the first state in the country to have a state-developed health insurance option for its residents, approved by CMS last Thursday.
The approval of Option for Colorado through the federal 1332 refusal now means that the state can continue to set tariffs for its standardized health insurance plan, which is required to be sold at lower prices and must be finalized by the end of the summer to take effect in 2023. , as the culmination of a decade of health policy efforts aimed at reducing health care costs.
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These efforts include the efforts of the state reinsurance programwhich was extended for another 5 years last year and spread the risk across the health insurance market to help insurers pay expensive claims, and Hospital provider fee which supports hospitals serving Medicaid and uninsured patients.
The insurance department recently completed its reinsurance payment parameters for 2023, which aims to maximize rate reductions, increase subscriptions and improve morbidity, while encouraging engagement and competition between operators and suppliers in individual markets.
In its last legislative session, Colorado passed 3 consumer protection laws, bills of the House 1284,, 1285and 1370all designed to reduce healthcare costs.
HB 1284 requires emergency medical services to be charged at the network rate, regardless of the facility and protects against unexpected and expensive charges. HB1285 prohibits hospitals from collecting debts if federal price transparency standards are not met, requiring providers to publicly disclose their standard prices for various services.
HB 1370, meanwhile, requires carriers to apply a co-payment structure only for prescription drugs in at least a quarter of their health plans.
CMS welcomes Colorado as a national leader in efforts to reduce health care costs.
“During this new model“Colorado is using federal savings to expand availability and coverage in the state like no other state has done before,” said CMS administrator Chiquita Brooks-LaSure. “The Colorado option is revolutionary and is a step in the right direction to reduce uninsured rates, while investing in the accessibility and improvement of health insurance coverage and promoting health equity. We encourage all states to consider innovative ways to use the Section 1332 exemption in the future to expand and improve coverage and reduce costs for their residents. “
Adopted in 2021, the Colorado option instructs state regulators to write a “standardized plan” – a consistent package of benefits and cost structures such as co-payments – that insurance companies are required to sell at premiums 5% below what they were in 2021. after inflation adjustments. This target increases to 15% below 2025.
Offered only in individual and small group markets, the plan is designed to save the federal government from its existing insurance premium subsidies by creating so-called “transitional” savings that can be returned to the state.
The state’s exemption application estimates that these savings will amount to $ 13.3 million in 2023 and $ 147.9 million by 2027.
The moves come as Colorado residents struggle with higher living costs.
In the current environment of inflation, the cost of living is emerging as a “serious” problem according to nearly 90% of those recently respondents from the Colorado Health Foundation. In his next door questionnairetwo-thirds of Colorado residents describe health care spending as a “very serious” problem.
This mood was reflected by the Colorado electorate, which voted for moderate Republican candidates. primary electionsresults that reflect widespread support for the problems of the “kitchen table”, according to local political reporter Marian Goodland.
The percentage of personal consumption expenditure on health services rose to 14.9% in 2019 before the pandemic.
Inflationary trends make insurance companies skeptical that reduction targets can be achieved while being actuarially stable. The Colorado Health Plans Association said the methodology used to calculate inflation, the medical index of the consumer price index, would not reflect the real increase in spending seen on the ground.
In 2020, Colorado’s front-line providers reported a 25% drop in health care visits, which were “Deep” impact on the health of Colorado residentsaccording to the Colorado Health Institute.
This slowdown in care, coupled with persistent labor shortages, has contributed to rising health care costs, according to the Colorado Hospital Association (CHA), as providers struggle to meet the accumulated needs of a growing population.
“Much of the focus of public policy in recent years has been on access to health care,” said Catherine Mulredy, chief strategic officer and vice president of legislative policy at the CHA. “The reality is that when supply outstrips demand, prices rise. So this does not bode well for accessibility, which in turn does not bode well for accessibility. We are talking about both indirect access to costs and direct access.
The provider is not there when you need it. There is not much optimism that I can draw in this picture at the moment, except that we are doing everything possible to prevent [the] ongoing crisis. “
Providers across the country are coordinating efforts to rethink healthcare, where telemedicine is emerging as a solution to meet demand and improve access.
Mulredi said the association is using new tools and roles as part of this rethink, such as advocating for policies that would allow greater use of certified registered anesthesiology nurses in advanced practices to manage some anesthesiology services.
“The policy principle that underpins our entire workforce is to allow the market or allow employers the flexibility they need to continue to provide high-quality and affordable care,” Mulredi said. “While we can find a professional who has the experience and training to perform the tasks under consideration, we must be able to use them and we must not see artificial limitations on their scope through their licensing advice or elsewhere. Part of this is the cost recovery policy, another is the licensing policy, part of its facilities policy, but there is a lot of work to be done. [CHA is] invested there to try to develop this rethinking of care delivery. “
Gov. Jared Polis clarified his administration’s goal of reducing consumer health care costs. In 2020, for example, Polis vetoed a bill that would increase coverage for alternative opioid treatment for fears that the measures would increase the cost of private insurance.
As spending rises and the midterm elections approach, health advocates will seek to continue to strike that balance between maintaining the health insurance price line and adding benefits to Colorado in the legislature next year.