Health Insurance Info for Colorado

news & commentary on health insurance and benefits

NEWSFLASH: Colorado Health OP

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The Colorado Division of Insurance moved swiftly to remove Colorado HealthOP from the list of approved insurers in Colorado and through the Connect 4 Health Colorado Marketplace Exchange. See the news release here.

DOI reverses on mandatory maternity in individual health plans

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In a bulletin issued March 15th, 2011, the Colorado Division of Insurance has “changed its interpretation” of their previous bulletin, issued in December of 2010, regarding maternity coverage for individual health policies issued in Colorado.

The controversy stems from a difference between the “applicability clause” in the enabling legislation, HB 10-1021, and the statute, as enacted. The applicability clause states that maternity coverage was to be provided for both issued and renewing policies, while the statute, as enacted, calls for maternity coverage to be provided only for “issued policies”. The Divisions’ initial guidance under the previous Bulletin did not require the coverage on renewal policies.

In it’s new bulletin, the Division, after “further statutory review”, finds that, in its opinion, the provisions of HB-10-1021 does indeed require coverage for maternity expenses for issued and renewing individual sickness and accident insurance policies and health care coverage contracts, reversing in toto it’s previous position, without showing any specific reason or legal basis for the change in its position.

Now, it’s no secret that this Bill was controversial, rammed through a Democrat-controlled legislature without any input from either the industry or the minority, and signed by the Governor post-haste. While touted as a “reproductive services” bill that ensured fairness, in actuality there is no fairness in requiring males of any age, children, and females of non-child bearing years to pay for this expansion of maternity coverage. Certainly, purchasing individual health insurance with maternity coverage was available in Colorado – so, what was the point of the legislation?

Colorado’s Democrat legislators have been attempting to recast the individual health insurance market as the mirror image of the small group market for years, and this legislation is one result of that thinking. The downside to this, and the biggest problem, is the cost to such a policy. Anyone who looks at group coverage, as compared to individual coverage, is aghast at the price, a point most Democrats seemingly ignore, and which has contributed to the decline in Colorado’s small group insurance pool, especially since the repeal of risk-based premium provisions in the small group market.

A quick analysis of the rates now being charged for individual health policies shows that the legislation has, indeed, made individual health insurance policies more expensive, and will have a negative effect on new policy issuance in Colorado. One wonders if that was the intent of the legislation – after all, with higher premiums, a certain segment of the population is locked out of the market, just simply based on price. If one can only buy Cadillacs, rather than something cheaper, does one simply not buy? This has the effect of increasing the pool of un-insureds in Colorado,  rather than expanding the pool of covered individuals, regardless of what the PR coming from Democrats would suggest.

Let’s not forget that Colorado residents lost a strong carrier when Aetna withdrew from the Colorado market due to this legislation. Will we have others withdraw, as well? One only needs to look at the disastrous outcome of the Kentucky health insurance market (and others, notably New Jersey) to see what will transpire as more and more carriers flee the state because of their inability to expand the risk pool because of high premiums, mandated benefits, and hostile regulatory and legislative actions.

Of course, Democrats have us covered there, too: their real solution is to get rid of all carriers and saddle the residents with a single-payor system. I shudder to think what that will cost in higher taxes and job loss.

Lastly, to add insult to injury, the Division, in its decision requiring maternity coverage in all policies renewing after January 1st, 2011, has authorized carriers to retroactively charge additional premium for the coverage, assuming the carrier has filed and has approved such premium. Even if the carrier has not filed for rates relative to renewal maternity coverage, the Division will allow such retroactive charges, once rates are approved, to the policyholder.

I’ll research and comment on the average rate increases this latest exercise in “fairness” will cost the average Colorado health insurance consumer in another post, assuming that such information is even available.

Health Care Reform: It’s Repealed!

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As reported everywhere, the Affordable Care Act has been repealed in the U.S. House of Representatives by a bipartisan vote (well, three Democrats, anyway). For details, go here, here, and especially, here.

What does this mean for Colorado? Not much, for the present, but stay tuned. While Senate Republicans insist that the repeal will be taken up in their chamber, Harry Reid’s words to the contrary notwithstanding, a more interesting showdown is approaching with regards the Court challenge mounted by 26 (and counting!) states’ Attorney General’s, of which Colorado is one. Ultimately the issue of Obamacare, as it’s now universally known, will be decided my nine Supreme Court Justices’, with Justice Kennedy almost certainly being the swing voter. As to the severability issue (the Affordable Care Act was passed without this protective clause) we’ll have to wait and see. While it would be easy to say that striking down any part of the Act would render the entire Act null and void, it isn’t that simple – and without the individual mandate, the Court could still say that what remains is still law. That would create a bottomless pit of debt, since the individual mandate is the financing mechanism in place for the entire program (which is why this is such a growth opportunity for the IRS – who else has the expertise to manage such a burden on the taxpayer?).

For the record, all of the Colorado Democrats in the House chamber voted against repeal, while all of the Republicans voted for repeal.

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  • Published: Dec 2nd, 2010
  • Category: insurance news
  • Comments: Comments Off on Colorado Insurance Commish stepping down December 1st

Colorado Insurance Commish stepping down December 1st

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In a press release dated November 29th, Barbara Kelley, head of the Department of Regulatory Agencies, State of Colorado, announced the departure of Marcy Morrison as Colorado Insurance Commissioner.

Effective December 1st, 2010, Morrison will be replaced on an interim basis by John Postolowski, who is currently the Deputy Commissioner of finance and administration at the DOI.

Postolowski has been described as a “veteran” state employee. He will serve in this capacity until Governor-Elect Hickenlooper appoints a permanent replacement.

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