Health plans

Colorado to offer state health plans

Colorado is reviving an old goal of progressive health care with a new twist, creating a public health insurance option that could be a model for other states trying to expand affordable coverage as they go beyond the pandemic.

Why is this important: Using flexibilities the Biden administration granted on Thursday, the state is trying to prove that a government-run health plan can attract more consumers and save money while avoiding the political pitfalls associated with low-cost systems. single payer.

Driving the news: Colorado on Thursday became the first state to get a federal waiver to create a plan called “Option Colorado” that will be offered on the state’s Affordable Care Act exchange beginning in 2023.

  • The scheme would compete with private schemes on the stock exchange with premiums on average 22.3% lower.
  • This is expected to save the federal government $214 million in premium tax credit subsidy spending next year.
  • Colorado would also expand a state grant program to reduce costs for people who are not eligible for ACA grants.
  • An estimated 32,000 residents could benefit from coverage through the option by 2027, when the waiver expires.

The big picture: Washington state is the only state with a public option, but Nevada, Oregon and Connecticut are debating whether to follow suit.

“We encourage all states to consider innovative ways to use Section 1332 waivers in the future to expand and improve coverage and reduce costs to their residents,” said CMS Administrator Chiquita Brooks. -LaSure, in a statement.

Yes, but: Washington’s 2019 plan has run into snags, including hospitals do not want to participate voluntarily due to low payments and policies that tie reimbursements to Medicare rates.

  • Private insurers are also reluctant to contract with the state and participate in the plan, in part because the hospitals were suspicious.
  • Washington officials are trying to fill coverage gaps in some underserved areas and set rates for next year to ensure every county in the state has a public option plan.
  • DWashington Health Benefit Exchange ata show that more Washington residents chose public option plans, called Cascade Care, in 2022 than in 2021.
  • In 2021, only 12% of people with plans on the exchange chose a Cascade Care plan, but in 2022 nearly a third of exchange plan customers chose a state-designed plan.

The plot: Colorado is trying to avoid some of Washington’s biggest problems.

  • The biggest difference is that insurers that offer ACA exchange plans in a county will also need to offer a Colorado option for individual and small group coverage upfront.

  • “That means everyone will basically have a Colorado option that makes their presence more prominent,” Krutika Amin, associate director of the ACA program at the Kaiser Family Foundation, told Axios.
  • Colorado’s public option plans will also need to meet grid adequacy requirements, to ensure there are enough providers.

Rollback: Centrist Democrats in Congress refused to put a public option in the Affordable Care Act over a decade ago.

  • The idea began to see a revival before the pandemic, and Colorado Governor Jared Polis legislation signed last year to set in motion his state’s version of a government-run plan.
  • President Biden touted a public option during his 2020 campaign, to build on Obamacare’s coverage gains.

What we are looking at: The end of the COVID-19 public health emergency could change the outlook for state-based health plans, as thousands of people who have remained on Medicaid plans throughout the pandemic may no longer be eligible. .

  • Whether this population can find affordable coverage in state markets remains to be seen.
  • States like Colorado are hoping to close that gap with grants for people at certain income levels who enroll in the Colorado option.

The bottom line: Other states will closely follow the experience of Colorado and Washington as the country moves away from the public health crisis and the uninsured population is expected to grow.