Choosing a Benchmark Health Insurance Plan: What is Essential for Colorado?
In the wake of the Supreme Court’s ruling on the Affordable Care Act (ACA), next on the agenda for Colorado’s implementation of health reform is selecting the essential health benefit benchmark plan. For many Coloradans who will be newly insured under ACA provisions, their experiences of health insurance—how adequate coverage is and whether it’s affordable—will be defined by Colorado’s decisions on essential health benefits.
Essential health benefits (EHB) are the minimum set of health services that must be included in most health insurance plans starting in 2014. (The link takes you to a CHI fact sheet and a presentation on the subject.) All small group and individual health insurance plans sold on and off the Colorado Health Benefit Exchange (COHBE) will be required to cover the essential health benefits. In 2016, this could represent up to one million Coloradans. Coloradans covered by large employers will generally be exempt from the essential health benefits guidelines.
Colorado must select an EHB benchmark plan from a set of existing health plans by October 1, 2012, in order to be approved by the Department of Health and Human Services (HHS). The EHBs are broad categories of services—prescription drugs, pediatric services including oral and vision care—and the benchmark plan will be used to establish the detailed benefit coverage within each category. The benchmark will apply to plans in 2014 and 2015, with HHS still to determine how EHBs are selected and covered for plans offered in 2016.
To meet the deadline, COHBE, the Division of Insurance (DOI) and Governor Hickenlooper’s office have begun soliciting stakeholder feedback. A comparison chart of plan options, based on data received from the health insurance carriers, is available. Two public meetings are scheduled for July and public comment on the benchmark options will be accepted through August 5. The eligible benchmark plan options include nine plans overall, six Colorado plans and three federal employee health plans. This process was reviewed during a recent webinar hosted by COHBE, DOI and the governor’s office, including identifying several objectives to be considered when determining the benchmark.
One of these objectives, balancing affordability and comprehensiveness, requires careful consideration. Information on cost will not be available until after the benchmark plan is selected and approved, when Colorado carriers will then establish a price for that plan. If premiums are viewed as too expensive, individuals may be more inclined to pay a less-costly tax penalty and forego coverage. A plan with narrowly-constructed benefits may increase the potential for underinsurance, as the insured must spend a significant percentage of their income on medical care that the plan does not cover. The plan must also be affordable for the state—Colorado will be responsible for covering the costs associated with state-mandated benefits that are not included in the benchmark plan.
The clock is ticking for Colorado to select a benchmark plan. If the state does not select a plan by the October 2012 deadline, HHS assigns a default benchmark plan, the state’s largest small group plan by enrollment. As with other aspects of implementing health reform like establishing COHBE, Colorado typically works to create the solution that is best for Colorado.