State health exchange proposed

QUICKREAD

How it works

• The Colorado Health Benefits Exchange is designed to make it easier for businesses to offer affordable health insurance to their workers by allowing them to band together, increasing the pool of people, to allow insurance companies to offer a variety of plans with lower premiums.

• The exchange would be established as a stand-alone public entity not affiliated with any government agency, and a nine-member panel of Coloradans not affiliated with an insurance company would oversee it. The members would be appointed by the governor and the Legislature.

• As called for under federal law, the exchange could not reject someone because of a pre-existing condition, and only those people who earn 135 percent or greater of the federal poverty level would qualify for federal subsidies to pay premiums.



Though it’s part of the controversial health insurance reform measure approved by Congress last year that Republicans vowed to kill, a bipartisan group of lawmakers introduced a measure into the Colorado Legislature on Monday to create a health benefits exchange program in the state.

The measure, introduced by Sen. Betty Boyd, D-Denver, and House Majority Leader Amy Stephens, R-Colorado Springs, is designed to allow businesses or associations to band together to offer larger pools of people who would participate in several plans.

As a result, insurance companies could create coverage plans at cheaper rates, the two lawmakers said.

“I got very tired of sitting on the business committee hearing people in small businesses say, ‘I’m sick of my rates rising at 20 and 30 and 48 percent a year,’ ” Stephens said. “We started the discussion years ago looking at how might exchanges provide a free-market, competitive environment to provide lower cost in health insurance. Regardless of what happens nationally, Colorado has to stand on its own.”

Because the federal Patient Protection and Affordable Care Act is being challenged in several courts across the nation, states are creating their own exchanges. They create a marketplace where people can compare prices based on their health care needs, some working much like an online ticket website that compares airline and hotel packages side by side.

Participation in the exchanges is voluntary for participants and insurance companies. Because the exchange would include the 300,000 Coloradans who currently can’t afford health coverage, but likely would qualify for federal subsidies to pay premiums, state officials expect participation to grow rapidly, said Lorez Meinhold, senior health care policy adviser to Gov. John Hickenlooper.

Meinhold said because participation is voluntary, health insurance programs such as the nationally touted one under Rocky Mountain Health Plans in Grand Junction won’t be affected.

“It doesn’t supplant Grand Junction’s model, but it actually gives us an opportunity to learn from the lessons of Grand Junction,” she said. “This exchange is going to be a voluntary, competitive marketplace that allows individuals and small businesses more choice and more comparability. So if someone wanted to go with Rocky Mountain Health Plans because they liked their focus on preventative care, that will potentially drive other carriers to do better practices as well.”

Previous state attempts to create similar exchanges have fallen flat, in part because insurance companies couldn’t offer affordable plans because they had too small a pool of participants to work with, Meinhold said.

The bill is to be heard in the Senate Health & Human Services Committee later this month.



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