Bill is First of the Session to Harmonize State Law with ACA-Mandated Changes
It’s not every day that Republicans, Democrats, insurance companies and advocacy groups all agree on a health care policy. But that was the case yesterday with Representative Beth McCann’s (D-Denver) bill to repeal CoverColorado (HB13-1115). The bill was sent to the Finance Committee after passing unanimously out of the House Health Insurance and Environment Committee on a 10-0 vote.
CoverColorado is a non-profit organization that provides health insurance coverage to Coloradans who do not have coverage through their employers and do not qualify for insurance on the individual market due to pre-existing conditions. By charging higher-than-average premiums – and using subsidies from the state – CoverColorado is able to provide health insurance for those who might not be able to get it elsewhere.
But Obamacare is a game changer. When the Affordable Care Act goes fully into effect next year, insurance companies will no longer be able to deny coverage based on pre-existing conditions. Bill proponents say that this change will render the services of CoverColorado unnecessary. In response, HB13-1115 proposes repealing CoverColorado and terminating coverage for all participants effective April 1, 2014.
In committee testimony, bill sponsor Rep. McCann explained that the bill provides for a “responsible phase out” that includes extensive communication and outreach with members to help transition them to a health plan through Colorado’s Health Benefit Exchange, which is scheduled to go live in October of this year. CoverColorado’s Executive Director, Suzanne Bragg-Gamble, reiterated the importance of a smooth transition and pledged that the organization would do everything possible to make customers aware of the change and the new options available. “We don’t want anyone who is currently with CoverColorado to have a gap in coverage,” she said.
In order to prevent coverage gaps, Rep. McCann also proposed an amendment requiring that CoverColorado clients who miss the enrollment deadline for the Colorado Health Benefit Exchange will still be able to purchase coverage.
One of the more interesting elements of the bill is a provision that would require any leftover funds from CoverColorado to be transferred to a foundation that helps those with high health needs. Rep. Amy Stephens (R-Monument) also proposed an amendment that would require 25 percent of leftover funds to be donated to the Colorado Health Benefit Exchange. The amendment passed without objections.
Testimony on the bill was almost uniformly positive and included representatives from the Colorado Consumer Health Initiative, the Colorado Association of Health Plans and a lobbyist speaking on behalf of Cigna, Aetna and Humana. Some expressed concerns as to whether the bill might leave gaps in coverage – particularly for those under age 65 who enroll in Medicare due to a disability but fail to sign up for supplemental Medicare insurance within the mandated six-month enrollment period. Rep. McCann’s amendment seemed to alleviate some of those concerns.
Because CoverColorado is subsidized by the state, Legislative Council estimates that the bill will result in a net increase in General Fund revenues of $2.5 million in FY 2013-14 and $5.0 million in FY 2014-15.
This bill is part of a larger trend we’re seeing this legislative session of policies that lay the groundwork for the implementation of the Affordable Care Act by harmonizing state statutes with the new mandates of the federal law. We expect to see more bills on this issue later in the session, and the Colorado Health Institute will keep you informed on this emerging trend.