Colorado released their plan to implement a public option plan this morning:
In accordance with HB19-1004, we recommend that Colorado establish a public option that is structured as a public-private partnership and initially sold in the individual market, both on and off the exchange, starting in the 2022 plan year. In the draft report, our actuaries estimated the proposal would result in plans available in 2022 that are about 9-18 percent less expensive than available plans. This final recommendation is aligned with that target. We the plan be administered by private-sector carriers, be available statewide to any resident seeking coverage in the individual market, and that people can utilize federal subsidies, if applicable. We recommend it be offered in the catastrophic, bronze, silver, and gold metal, and that it promote quality through standardized benefit designs.
This is going to be very good news for folks who do not receive subsidies. They will see a significant premium decrease.
However, as I wrote in September, the multiple public option plan will have premium increases for subsidized buyers who purchase plans priced below the benchmark:
Our analysis suggests that introduction of a single public option plan in each rating area of Colorado would reduce the contribution a sample subsidized consumer would need to make to the premium of the lowest-cost plan in each metallic tier by 40.0 percent to 73.4 percent. Introduction of multiple public option plans in each rating area would, by contrast, decrease net premium contributions by 6.5 percent for the lowest-cost gold plan while increasing the contribution required for bronze and silver plans by 15.7 and 0.7 percent, respectively.
The fact that Colorado’s 2019 market currently has limited spreads between the least expensive silver plan and benchmark plan contribute to this disparity of impact between the single public option and multiple public option scenarios….
Colorado is attempting to reduce gross premiums. They are also attempting to keep all the insurers in the market to maintain competition and reduce political opposition to this plan. Those are reasonable goals. However, due to the structure of the subsidy system, these choices creates winners and losers. The winners will be non-subsidized families seeing significantly lower premium options. The major losers will be some clinicians seeing lower payment rates and subsidized buyers who are currently purchasing plans priced below the benchmark.
rikyrah
Thanks for keeping us up to day, Mayhew.
Is there any notice about those folks in Kentucky who were screwed by Bevin getting their healthcare back with the election of the new Governor?
David Anderson
Highly likely that the Kentucky work requirements and administrative burden hurdles will be either lowered or completely removed come January.
TaMara (HFG)
Friends just complained to me that their premium went up significantly because of this…but were realistic that it was still extremely low and affordable – much less than their monthly car insurance. I haven’t seen what it’s going to do to mine yet. I kind of just roll with it. LOL
Miss Bianca
I cover government meetings, which includes the hospital boards. Here’s one take, from their perspective, on what this means:
The rates will be set by the state, which amounts to 175-225% of Medicare compensation
(The average of (hospital district redacted) charge is about 215% of Medicare compensation)
The state’s objective is to ratchet down costs – the third rail is controlling medical care usage. The state will have zero leverage over pharmacy and national insurance company – the only variable they can control is hospital costs. Namely, hospital and medical personnel compensation.
So, what will likely happen is that pretty soon, any insurance company that stays to do business in Colorado will also only compensate at the state rate.
Now, I know how everyone loves to rag on hospital and clinic charges, but that’s only one piece of the health care cost puzzle.
And my understanding is that meanwhile, our tax dollars in CO will be going to support the ACA at a national level, but we will NOT be eligible for ACA-backed plans in CO because we will have a state plan in place, *and* we will be taxed to support that separate plan as well. Do I understand this correctly, David?
I personally am going to be paying $55 per month for an Anthem Silver plan. I fail to see at this point how the state plan will actually be a better deal for me. I also fail to see how a state-based “Medicare for all” plan can actually work, given that lack of leverage over, say, prescription drug costs.
Help me, Anderson/Mayhew! What am I missing here? Because to me, this seems like a really, really ill-thought-out idea, given that we actually have decent, affordable ACA-backed plans in Colorado.
David Anderson
@Miss Bianca: Not quite… these plans will be offered alongside the plans currently being offered on exchange in Colorado. Advanced Premium Tax Credits (federal money) will apply to these plans as well.
You are right that the intent of the plan is to get some cost controls in place. The problem Colorado is trying to solve is that their non-Denver Metro area non-subsidized market is a dumpster fire due to very high premiums. The on-Exchange, subsidized market is doing very well for itself.
Miss Bianca
@Miss Bianca: OK, off to read the actual plan precis.
Miss Bianca
@David Anderson: thanks. I anticipate having to write more about this, so I may be bugging you at some future point. What a blessing to have so many subject experts here at BJ!
piratedan
that seems to be THE challenge in getting health care out to the rural communities in the west… Colorado has some decent sized metro areas (Denver, Colorado Springs, Pueblo) and a goodly number of small towns like Trinidad, Durango, Fort Collins, Grand Junction, et al) and some high end vacation destinations (Estes Park, Vail, Glenwood Springs) and a whole lotta small mining, farming communities that sit as county seats where there is a fuck all around them for 20+ miles be it cows or trees. The hard part is cost benefit factor of keeping a clinic of any kind in the small places and even the drain of keeping something viable in the smaller towns when you consider the costs involved.
In Arizona, they said fuck it, if you aren’t financially viable, well it sucks to be you, consider it a “perk” of living out in the boonies courtesy of a GOP governor and a gerrymandered state lege.
Here’s to hoping that they can figure it out, but just like taxes, it appears that as far as health care subsidies are concerned, its people in the cities paying for people out in the boonies. While I don’t have an issue (in theory) of sharing the load, I sure as hell wish that SOMEONE would drive the message home that your fellow citizens in the big cities/suburbs that are doing this for you, so we would like it if you would quit pissing and moaning about it.