This page is dedicated to helping consumers quickly find health insurance resources in the state of Colorado. Here, you’ll find information about the various types of health insurance coverage available in the state. You can find the basics of the Colorado health insurance marketplace/exchange (Connect for Health Colorado) and how open enrollment and special enrollment periods work for plans sold in the exchange; a brief overview of Medicaid expansion in Colorado; an explanation for why short-term health insurance is not available in the state; details about state-specific Medicare rules; as well as a collection of Colorado health insurance resources for residents.

Colorado has long been a leader in health reform

Colorado has long been a leader in terms of healthcare reform. Before the ACA implemented reform on a federal level, Colorado had already made maternity coverage mandatory in the individual market, and had banned gender-based premiums.

Colorado became the second state in the nation to actively pursue single-payer healthcare, with Amendment 69 appearing on the 2016 ballot. However, voters rejected the push for single-payer by a wide margin (Vermont was the first state to implement a plan to achieve single-payer, but they abandoned that path in December 2014).

Colorado implemented a reinsurance program as of 2020, joining a growing number of states that are using 1332 waivers to obtain federal pass-through funding for reinsurance to reduce unsubsidized health insurance premiums and stabilize the state individual market. Individual health insurance premiums in Colorado dropped by an average of 20 percent in 2020, thanks to the reinsurance program (although after-subsidy premiums increased for many people who receive premium subsidies). And overall average rates decreased again in 2021, by 1.4 percent.

Colorado regulators and lawmakers were working on a public option program that the state hoped to debut in the fall of 2021, for coverage effective in 2022, but the legislation to create it was abandoned amid the COVID-19 pandemic. Lawmakers plan to introduce a different version of it during the 2021 session.

Colorado’s uninsured rate dropped by nearly half from 14.1 percent in 2013, to 7.5 percent in 2018, although it grew to 8 percent in 2019. The Colorado Health Access Survey found an even lower uninsured rate — just 6.5 percent — which has stayed steady from 2017 through 2019.

Colorado’s health insurance marketplace

Colorado utilizes a state-run health insurance exchange — Connect for Health Colorado — which is one of just three exchanges in the nation with a permanently extended open enrollment period (November 1 to January 15).

The marketplace is used by individuals and families who need to purchase their own health coverage, as well as people who are eligible for income-based Medicaid or CHIP. People buy their own health insurance in a variety of situations, including being an early retiree, being self-employed, or being employed by a small business that doesn’t offer health benefits.

Colorado’s marketplace no longer offers small business health plans, but Kaiser still has exchange-certified small business plans for sale, which employers can purchase directly from Kaiser or with the help of a broker or agent.

Eight insurers participate in the Colorado health insurance marketplace as of 2021, and for 2021, three of the state’s insurance companies (Oscar, Cigna, and Rocky Mountain Health Plans) expanded their coverage areas. Insurer participation in Colorado is relatively robust compared with much of the country, but coverage tends to be localized and plan availability is concentrated in urban areas. In 10 of the state’s 64 counties, those who shop the state’s exchange have a single carrier option (Anthem Blue Cross/Blue Shield) in 2021 (but that’s down from 22 counties in 2020).

Average premiums in Colorado’s individual market dropped by 20 percent for 2020, but that was before any subsidies were applied. After subsidies, many enrollees saw higher monthly premium costs in 2020, due to lower benchmark plan premiums and the resulting decrease in premium subsidy amounts. For 2021, the eight insurers initially proposed an overall average rate increase of just over 2 percent, but once regulators finalized the rates, the changes for 2021 amounted to an average rate decrease of 1.4 percent.

Read our overview of the Colorado health insurance marketplace – including news updates and exchange history.

Colorado open enrollment period and dates

Colorado implemented rules to permanently extend its annual open enrollment period to 2.5 months (November 1 to January 15).

Open enrollment for 2021 medical insurance in Colorado ran from November 1, 2020 through January 15, 2020. This window was an opportunity for new enrollees to select coverage in the individual market (on-exchange or outside the exchange), and for existing enrollees to compare the available options for 2021 and renew or change their existing coverage. Enrollees should also provide updated financial information to the exchange during open enrollment, in order to have financial assistance eligibility based on accurate information for the coming year.

When there were still nine days remaining in open enrollment for 2021 coverage, Connect for Health Colorado announced that more than 172,000 people had enrolled in coverage. This was already a record high, and sign-ups continued to increase over the remaining days of the enrollment window. Enrollment the year before, for 2020 coverage, had reached nearly 167,000 people, although that was down from just over 170,000 enrollees in 2019.

To address the COVID-19 crisis, Colorado opened an emergency special enrollment period for uninsured residents. It ran through April 30, 2020, and 14,263 residents enrolled in coverage during that window.

Read more about the Colorado health insurance marketplace.

Learn more about how open enrollment works for individual market health insurance plans, both on-exchange and outside the exchange.

Grandmothered health insurance plans terminated

Colorado required all grandmothered (transitional) health insurance plans to terminate by the end of 2015. There are still grandfathered health insurance plans in Colorado, but all other individual and small-group plans are now ACA-compliant.

Medicaid expansion in Colorado

Colorado is among the 36 states and the District of Columbia that have expanded Medicaid eligibility under the Affordable Care Act. The ACA Medicaid expansion extends eligibility to most non-elderly adults at or below 138 percent of the federal poverty level.

As of mid-2020, total enrollment in Medicaid plans and CHIP plans in Colorado stood at nearly 1.4 million people, which was 77 percent higher than it had been in 2013.

Learn about Colorado’s Medicaid and Child Health Plan Plus (CHP+) programs at the Colorado Department of Health Care Policy & Financing website, and learn about Colorado’s Medicaid expansion in our overview.

Short-term health insurance in Colorado

As a result of strong new state regulations that took effect in 2019, there is no longer any short-term health insurance coverage available in Colorado. The state created a special enrollment period for people who had short-term health insurance in Colorado but who lost their coverage because their plan terminated and they were unable to purchase another short-term plan (because insurers no longer offer short-term coverage in Colorado).

Colorado legislators’ positions on the Affordable Care Act

In 2009, Colorado Sens. Mark Udall and Michael Bennet – both Democrats – voted yes on the Affordable Care Act. Colorado’s five Democratic House members also voted yes, while the other two representatives, both Republicans, voted no.

The current Colorado congressional delegation includes two Democratic Senators: Michael Bennett and John Hickenlooper, both of whom support the ACA. As of 2021, Colorado has seven representatives in the U.S. House: four Democrats, and three Republicans. Support for the ACA is split along party lines in the state’s House delegation.

At the state level, Colorado was one of the only states that moved in a bipartisan manner to establish a state-run health insurance marketplace. When John Hickenlooper was governor, he signed legislation authorizing the marketplace in 2011. The state marketplace is called Connect for Health Colorado. The state also adopted Medicaid expansion under the Affordable Care Act.

Colorado’s high-risk insurance pool

Before the ACA reformed the individual health insurance market, coverage was underwritten in nearly every state, including Colorado. People with pre-existing conditions were often unable to purchase coverage in the private market, or were only eligible for policies that excluded their pre-existing conditions or charged them premiums that were significantly higher than the base rate.

CoverColorado was created in 1991 to provide an alternative for people who were not able to get comprehensive coverage in the private market because of their medical history.

One of the primary reforms ushered in by the ACA was guaranteed issue coverage in the individual market. An applicant’s medical history is no longer a factor in eligibility, which means that high-risk pools are no longer necessary the way they once were. CoverColorado stopped enrolling new applicants at the end of 2013, and the program ceased altogether in March 2014.

Medicare coverage and enrollment in Colorado

By November 2020, there were 946,170 enrollees in Medicare in Colorado. About 56 percent of them were enrolled in Original Medicare, with the other 44 percent enrolled in Medicare Advantage plans instead.

Read more about Medicare in Colorado.

Read more about Medicare’s annual open enrollment period, which Medicare beneficiaries can use to compare available Part D and Medicare Advantage plans and renew or make a change to their coverage.

Colorado health insurance resources

• Colorado Child Health Plan Plus (CHP+)
• Colorado Division of Insurance — Oversees, regulates, and licenses the health insurance companies that offer plans in the state, as well as brokers and agents.
• Colorado Department of Health Care Policy and Financing — Oversees Medicaid and CHP+ in Colorado. Also played a key role in developing the framework for the state’s proposed public option plan, which is likely to be considered by lawmakers in 2021.
• Colorado.gov/Health
• Connect for Health Colorado — The state-run marketplace where individuals and families can compare plan options, enroll in coverage, and receive financial assistance based on their household income. The marketplace is also used for enrollment in Medicaid and CHP+
• Colorado Senior Healthcare/Medicare resources (State Health Insurance Assistance Program) — A local service that provides information and assistance to Medicare beneficiaries and their caregivers.

Colorado health reform at the state level

Colorado enacted legislation in 2019 to create a reinsurance program, and to get the ball rolling on a public option in the state, as described above. The Colorado Health Institute has an excellent overview of some of the key pieces of legislation the state passed in 2019.

Legislation that would have created the public option was abandoned in 2020, however, as a result of the coronavirus pandemic.

See the bottom of this page for a summary of other recent state-level health reform legislation.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post Colorado health insurance appeared first on healthinsurance.org.

Key takeaways

• Colorado has implemented a permanent 2.5 month open enrollment period; enrollment for 2021 plans continued through January 15, 2021.
• Colorado regulators approved an overall average rate decrease of 1.4% for individual market plans for 2021 (versus a 2.2% increase that insurers initially proposed).
• Colorado has enacted an “easy enrollment program” similar to the one Maryland has implemented; will debut in early 2022.
• Colorado has enacted a law (SB215) aimed at making health coverage more affordable in the individual market.
• Colorado implemented a reinsurance program starting in 2020. It pays a larger portion of claims in areas where premiums are highest, in an effort to make coverage more affordable in those areas.
• Regulators finalized a proposal for a state option to be offered alongside private health insurance by 2022. Lawmakers abandoned the legislation amid the COVID-19 pandemic, but hope to reconsider it during the 2021 session.
• Average approved premiums in the individual market decreased by 20% for 2020, with the decrease based in large part on the state’s new reinsurance program.
• But some enrollees who get premium subsidies saw sharp premium increases for 2020.
• Oscar Health joined the exchange in the Denver area for 2020, bringing the number of insurers in Colorado’s exchange to eight.
• Colorado insurers began adding the cost of CSR to silver plan rates in 2019 (after adding it to all plans in 2018).
• More than 172,000 people (a record high) had enrolled in 2021 plans by January 6, with more than a week remaining in open enrollment.
• Rates grew slowly in 2015 and 2016, sharply in 2017 and 2018, and slowly in 2019. They declined sharply for 2020, and declined slightly for 2021.
• State is seeking federal input on the likelihood of approval for a 1332 waiver to expand catastrophic plans.

Colorado implemented new regulations for short-term health plans in 2019, effectively eliminating them in the state. As of April 2019, there were no longer any short-term plans for sale in Colorado. But Colorado is among the states with the highest enrollment in health care sharing ministry plans, and had around 10 percent of the nation’s direct primary care clinics as of 2018. Sharing ministry plans and direct primary care plans are both sometimes seen as another alternative to ACA-compliant health plans.

Bucking the national trend, bronze plans became the most popular option in Colorado as of 2016, with 45 percent of enrollees picking bronze during open enrollment. Nationally, silver plans are twice as popular as bronze plans across all of the state-run exchanges, and more than three times as popular as bronze plans in states that use Healthcare.gov. Bronze plans were also more popular in Colorado than in other states in 2014 and 2015, but 2016 was the first year that bronze plan selections outnumbered silver in Colorado. That continued to be the case in 2017, 2018, 2019, and 2020.

Colorado has a lower-than-average percentage of enrollees who qualify for premium subsidies (although the number of people who qualify for subsidies increased when premiums grew sharply in 2017 and 2018), so there are a significant number of enrollees who pay full-price for their coverage. Bronze plans are the lowest-cost option, so they tend to appeal to people who have to pay full price. In 2020, two-thirds of unsubsidized buyers in Colorado selected bronze plans.

2021 rates and plans: Average rate decrease of 1.4%, plus coverage area expansions for some insurers

Colorado’s individual market insurers initially proposed an overall average rate increase of 2.2 percent for 2021, with some insurers proposing increases and others proposing decreases. But after some filings were revised and the rate review process was complete, the Colorado Division of Insurance announced that overall average rates would decrease by 1.4 percent for 2021, with average premiums declining for every insurer except Cigna and Anthem (and the approved increases for those two insurers are much less significant than the insurers had initially proposed).

In the small group market, insurers proposed an overall average rate increase of 5.7 percent, and the Division of Insurance approved an overall average increase of 3.8 percent.

For the eight individual market insurers, all of which sell plans through Connect for Health Colorado, the following average rate changes were approved for 2021 (listed in order of carrier market share, from largest to smallest):

• Anthem (HMO Colorado): Average increase of 0.3%. Anthem has 70,787 members. [Note that Anthem also has a PPO under the name Rocky Mountain Hospital and Medical Services, but they only offer an off-exchange catastrophic plan and have just 296 members; the average approved rate change for the off-exchange catastrophic PPO is a 7.3 percent decrease, but this affects very few people.]
• Kaiser: Average decrease of 1.5%. (approved as filed) Kaiser has 60,523 members. Filing notes that Kaiser is not including a COVID-19 adjustment in its rates for 2o21.
• Bright: Average decrease of 5.5%. Bright has 41,132 members.
• Cigna: Average increase of 3%. Cigna has 29,491 members. They are expanding into four new counties for 2021 (El Paso, Larimer, Teller, and Weld).
• Friday Health Plans: Average decrease of 5.1% (filing was for an even more substantial decrease of 12.2%). Friday has 10,250 members.
• Rocky Mountain Health Plans: Average decrease of 10%. RMHP has 2,417 members in two counties in 2020. But they will be expanding into a dozen additional counties in 2021.
• Denver Health: Average decrease of 4.6 percent. (approved as filed). Denver Health has 1,368 members.
• Oscar: Average decrease of 4.2%. Oscar has 1,014 members. Oscar offers coverage in the Denver area in 2020, and will expand into the Boulder area for 2021.

Colorado’s reinsurance program, which took effect in 2020, is credited with keeping proposed premiums for 2021 an average of nearly 21 percent lower than they would otherwise have been.

Colorado “easy enrollment” program will debut in early 2022

In June 2020, Colorado lawmakers approved HB1236, which calls for the creation of an Affordable Health Care Coverage Easy Enrollment Program in the state, starting in 2022 (based on 2021 tax returns). The legislation, which was signed into law by Governor Polis in early July, is supported by the state-run exchange, Connect for Health Colorado, and is very similar to a program that Maryland implemented in 2020.

HB1236 will let Colorado residents indicate on their state tax returns that they would like Connect for Health Colorado to determine, based on the information on their tax return, whether they might be eligible for free or subsidized health coverage. If so, the exchange would be able to reach out to the person to help them enroll in coverage — Medicaid, CHP+, or a subsidized private plan in the individual market.

The legislation will create a special enrollment period for people identified by the program as eligible for free or subsidized coverage, so that they would have a chance to enroll in coverage early in the year (soon after filing their tax return) instead of having to wait for the open enrollment period in the fall. Amendments made by the Senate in June clarify that the person would have to be represented on a Colorado tax return filed by the April 15 deadline, and that the insurer will not have to further verify that the person is eligible for a special enrollment period.

A recent Colorado Health Access survey found that people with income between 139 and 400 percent of the poverty level (ie, people who are eligible for premium subsidies in the exchange) are more likely to be uninsured than people with lower or higher income. The easy enrollment program would help to identify these individuals and allow the exchange to provide them with targeted enrollment assistance outside of the normal open enrollment window.

Colorado’s new Health Insurance Affordability Enterprise law

Colorado Senate Bill 215 was signed into law on June 30, 2020. The law, which is known as the Health Insurance Affordability Enterprise, will fund the state’s existing reinsurance program for five more years (it was previously only funded through 2021), and will fund state-based subsidies to make coverage more affordable, as well as outreach and enrollment activities.

The law calls for the state to start collecting a new fee assessed on health insurance premiums for health plans subject to regulation by the Colorado Division of Insurance (ie, individual plans and fully-insured group plans, but not self-insured group plans). The fee will replace the federal Health Insurance Tax, which is being eliminated after the end of 2020. The bill will also impose a new assessment on Colorado hospitals, replacing (at a lower amount) the existing fee that funds Colorado’s reinsurance program.

The funding to make coverage more affordable will be allocated to two separate programs. The first, which will become available as of 2022, will send money directly to health insurance companies so that they can reduce premiums for people who receive premium subsidies under the ACA. This is designed to address the fact that people who get ACA premium subsidies are generally getting smaller subsidies now that the reinsurance program is in effect (details below), making their net premiums higher than they were prior to 2020.

The second program will be state-based premium subsidies, available starting in 2023, for people with income up to 300 percent of the poverty level who don’t get ACA premium subsidies (including undocumented immigrants and people caught by the family glitch).

New Mexico lawmakers tried to implement a similar bill earlier this year; it passed in the New Mexico House, but died immediately in the Senate. New Jersey lawmakers are working on similar legislation in 2020; if approved, it would start to provide state-funded premium subsidies as soon as 2021.

Colorado insurers began adding the cost of CSR to silver plans rates as of 2019 (a change from 2018, when they spread the cost across the premiums for all plans), and continue to use that approach in 2020.

State is seeking CMS input on whether federal permission could be granted to allow anyone to buy a catastrophic plan

S.B.132 was signed into law in 2018, and directed the state to conduct an actuarial study on the impact of allowing people over the age of 30 who don’t have hardship exemptions to purchase catastrophic plans. The bill was amended in February 2018 to ensure that the catastrophic plans would only be available through the exchange. The provision requiring that the state conduct an actuarial study and only submit the 1332 waiver if the proposal would not reduce total premium subsidies or increase average premiums was also an amendment (the initial bill would have just directed the state to seek federal approval to expand access to catastrophic plans).

The ACA’s premium subsidies cannot be used for catastrophic plans, so the expansion of catastrophic plans would likely only appeal to healthy people who aren’t eligible for subsidies and are currently paying full price for the cheapest bronze plans they can get (catastrophic plans are generally less expensive than bronze plans because they’re in a separate risk adjustment pool). The legislation stated that if the study found that doing so would not reduce the total amount of premium subsidies provided to Colorado residents, and would not result in higher average individual market premiums, the state would then submit a 1332 waiver to the federal government, seeking permission to allow anyone in Colorado to purchase a catastrophic plan (the ACA limits the sale of these plans to people under age 30, and people who have a hardship exemption from the ACA’s individual mandate).

The state contracted with Wakely for the actuarial analysis, and the results were published in November 2018. Wakely concluded that total premium subsidies would likely increase (by no more than 6.6 percent) during the first year of universally available catastrophic plans. This is because healthier people would be expected to migrate to lower-cost catastrophic plans, leaving a less healthy population in the metal-level plans. That would lead to higher premiums for the metal-level plans, and since premium subsidies are based on the cost of the benchmark silver plan, subsidy amounts are expected to be higher. And since the people switching to catastrophic plans are expected to be those who aren’t eligible for subsidies anyway, they wouldn’t be giving up subsidies (and thus saving the federal government money) with their switch to catastrophic coverage.

The ACA only allows 1332 waivers to be approved if doing so would not increase federal deficits. Since premium subsidies are funded by the federal government, Wakely’s analysis notes that “allowing greater enrollment in Catastrophic plans would not meet the Federal deficit requirement as part of a 1332 waiver.” But in October 2018, CMS issued new guidance for 1332 waivers, noting that although waivers still cannot be approved if they would increase the federal deficit in the long run, it’s now possible for a waiver to be approved if it would result in increased federal spending in a given year, but not overall. In light of this and the result of Colorado’s actuarial study, Colorado Insurance Commissioner Mike Conway sent a letter to CMS in November 2018, asking whether a 1332 waiver to expand access to catastrophic plans would be likely to be gain approval. The state is still awaiting a reply as of 2020.

Information about S.B.132, the actuarial study, and correspondence with CMS can be found here.

Allowing brokers to charge fees

S.B.136 was signed into law in 2018. It allows insurance brokers to charge clients a fee if the insurer doesn’t pay a commission. Brokers were not previously allowed to charge any sort of fee, and have historically only been compensated via commissions from insurance carriers (with enrollees paying the same price for their coverage, regardless of whether they use a broker or not).

But some insurers have eliminated broker commissions, resulting in fewer brokers who are willing to work with individual market clients (in the group market, insurers still pay commissions). S.B.136 was designed to ensure that there will continue to be brokers available to serve people who buy coverage in the individual market, although the consumers may have to pay for that assistance themselves.

The Colorado Division of Insurance proposed regulations for broker fees (here and here), which became effective August 8, 2018.

DOI banned differing commission structures for brokers

In late 2015, many of the nation’s health insurance carriers began reducing or eliminating broker commissions, mostly for plans sold outside of open enrollment (during special enrollment periods triggered by qualifying events) or for benefit-rich plans at the gold and/or platinum level.

The general consensus was that the commission cuts were an effort by health insurance carriers to limit sales in general, or to limit sales of benefit-rich plans, which tend to be more popular among enrollees who have health conditions, and are more expensive to insure. In 2014 and 2015, eligibility for special enrollment periods was very loosely enforced by Healthcare.gov and some of the state-run exchanges, and carriers noted that healthcare utilization tended to be higher for people who enrolled outside of open enrollment.

In December 2015, Colorado’s Department of Insurance issued a regulatory bulletin (B-4.87) stating that carriers cannot offer “differing commission structures,” which they defined as different commission levels for different metal levels, different commission structures for plans sold during open enrollment versus outside of open enrollment, or “not paying commissions on certain plans offered in the State of Colorado.” The Department of Insurance warned carriers that none of those actions are allowed, and that carriers that utilize differing commission structures would risk “enforcement actions to remedy those violations.”

The purpose of the state’s regulatory bulletin was to protect consumers’ access to the full range of plans available, regardless of whether the consumer is enrolling during open enrollment or as a result of a qualifying event, and regardless of what metal level plan the consumer needs.

Bulletin B-4.87 is still in effect, but some insurers in Colorado have simply switched to a model under which they pay no commissions at all for new enrollments. There’s no “differing commission structure” so the lack of commissions doesn’t run afoul of the regulation. But it does result in fewer brokers being willing to assist people with individual market coverage (commissions are still paid by all insurers for group health insurance plans). After declining in 2017 and 2018, broker commissions have increased again for 2019, as insurers have started to once again be profitable in the individiual market

Regulators considered, but rejected, a switch to a single rating area

Colorado has significant disparity in terms of healthcare costs — and thus health insurance premiums — from one area of the state to another. Rates in the mountain areas of the state are far higher than rates along the I-25 corridor, and although subsidies make coverage affordable for people who are eligible, there’s no assistance for someone earning more than 400 percent of the poverty level.

As an example, a 59-year old in Pagosa Springs who earns $50,000/year would have had to pay $1,063/month (25 percent of her income) for the least expensive bronze plan available in the exchange in 2019, and is ineligible for any premium subsidies to make the coverage more affordable (note that if she earned $48,000, she would be eligible for $1,006/month in premium subsidies and could get the least expensive plan for just $56/month; the subsidy cliff is most significant for older applicants in areas where health insurance is expensive).

In an effort to address the disparity, then-Governor Hickenlooper signed HB 1336 into law in May 2016. The bill directed the Colorado Department of Insurance to study the impact of making Colorado one unified rating area, meaning that premiums would rise in the areas where they’re currently lower, and would fall in the mountain areas of the state where they’re currently higher.

The DOI’s report on the impact and viability of a single rating area was presented to the legislative committees in August 2016. The DOI did not recommend that the state become a single rating area, but recommended instead that the state work to find ways to lower the underlying cost of health care, since that’s what drives health insurance premiums. Insurance Commissioner Marguerite Salazar noted that a single rating area strategy could backfire, leading carriers to adjust their plan offerings or even leave the state altogether.

As of 2020, Colorado has nine rating areas (there were 11 prior to 2015, but some areas were combined as of 2015). The District of Columbia uses a single rating area, as do six states: Hawaii, Delaware, New Hampshire, New Jersey, Rhode Island, and Vermont.

Increased legislative oversight

In March 2016, Governor Hickenlooper signed HB1148 into law. HB1148 gives the legislative oversight committee increased authority to monitor and oversee various aspects of Connect for Health Colorado’s rule-making processes.

The law gives the legislative committee “oversight over rules and policies proposed by the health benefit exchange that affect bidding and awarding contracts, carrier and regulating carrier participation, regulating broker participation and compensation, interacting with other state agencies, managing and compensating the assistance network, or the handling of any type of appeal.”

Colorado CO-OP shut down by regulators

On October 9, 2015, Colorado HealthOP — the state’s ACA-created CO-OP — joined six other CO-OPs that had already failed (and by the end of 2015, 12 of the original 23 CO-OPs had shut down; as of 2020, there were only four CO-OPs still in operation around the country). The Department of Insurance announced that they had made the difficult decision to decertify Colorado Health OP from the state-run exchange, effectively shutting down the CO-OP.

Although Colorado HealthOP was the seventh CO-OP to fail, they were the first one to publicly disagree with regulators over the shut-down. In their message to members, the CO-OP called the Colorado Division of Insurance’s decision “both irresponsible and premature” and noted that they were “astonished and disappointed by the DOI’s decision”. The CO-OP had said just the day before that they had three viable solutions for funding, and they noted that they had presented them to the DOI earlier in the week.

Colorado Health OP had said that they were on track to pay back their federal start-up loans in full and ahead of schedule, but that was derailed by the announcement on October 1 that risk corridor payments would be just 12.6 percent of the amount owed to each carrier. The Colorado Division of Insurance explained that although the CO-OP had been under DOI supervision for most of 2015, the carrier had been meeting their reserve requirements until October. But the risk corridor shortfall meant that “the Colorado HealthOP’s rainy day fund will be completely wiped out, and is in fact expected to be in the negative by $34 million by the end of the year [2015].” Because of this, the DOI felt they had no option other than to decertify Colorado Health OP from the exchange.

In a last-ditch effort to be allowed to participate in the 2016 open enrollment, Colorado HealthOP filed a lawsuit in Denver District Court on October 19, requesting an injunction and temporary restraining order against then-Insurance Commissioner Marguerite Salazar. But by the end of the day, following a closed-door court hearing, the case had been withdrawn (and suppressed by the court) and the CO-OP had agreed to begin the process of winding down their operations by the end of the year.

Colorado HealthOP had about 80,000 people enrolled in individual plans in 2015. All of those members had to sign up for new coverage for 2016. There were also almost 3,000 members enrolled in small group plans, and initially, the plan was that they would have to switch to new plans as of their next renewal date. But on November 17, Colorado Insurance Commissioner Marguerite Salazar announced that Colorado HealthOP’s small business plans would also terminate as of December 31, and small businesses with Colorado HealthOP plans had to secure coverage with a different carrier for 2016.

Universal healthcare defeated in Colorado in 2016 election

Supporters of universal healthcare in Colorado worked for months to gather signatures in support of ColoradoCare, a universal coverage system that would have gone into effect in 2019 if voters had approved it in the 2016 election. But voters resoundingly rejected the measure, with just 21 percent in favor, and 79 percent opposed.

ColoradoCare would have been enacted using a 1332 waiver under the ACA, which allows states to chart their own course for healthcare reform, as long as they do so in a way that covers at least as many people as the ACA would have, keeps coverage affordable and at least as comprehensive as it would be under the ACA, and doesn’t increase the federal deficit.

If those general guidelines are satisfied, the state can receive funding from the federal government equal to what would have been provided to the state’s residents in premium tax credits, cost-sharing subsidies, and small business tax credits. In Colorado, those funds, together with Medicaid waiver funds, were projected to total $11.6 billion in 2019. Total costs to run a zero-deductible, universal coverage program in Colorado were estimated at $35.6 billion for 2019. The $25 billion difference would have been generated through a 10% income tax. Employees would have paid only a third of the total tax, with their employers kicking in the remaining two-thirds (ie, employees would have paid 3.33 percent of their gross pay).

Grandmothered plans discontinued at the end of 2015

The Colorado Division of Insurance announced that transitional or “grandmothered” health plans had to be discontinued at the end of 2015. As of 2016, all individual and small-group plans in the state were either fully ACA-compliant, or grandfathered (effective dates prior to March 23, 2010).

Despite the fact that many other states are still allowing grandmothered plans to remain in force, there was controversy in Colorado over the fact that grandmothered plans were allowed to renew at all after January 1, 2014. Lawmakers in Colorado passed a bill in 2013 (House Bill 13-1266) that aligned Colorado healthcare law with the ACA. It required Colorado plans to be compliant with the ACA as of their issue or renewal date starting on January 1, 2014. Ultimately, the Division of Insurance used their regulatory power (also provided for in HB 1266) to allow the renewal of grandmothered plans in 2014, but there were questions as to whether or not they overstepped their bounds in doing so.

Background on Colorado’s exchange

Then-Governor John Hickenlooper informed the federal government in October 2012 that Colorado intended to run its own health insurance marketplace, and the state received federal approval of its plan in December 2012.

Unlike politicians in most other states, Colorado legislators voted on a bipartisan basis to move ahead with a state-run exchange. Legislation to establish the state marketplace passed in May 2011 and was signed by Hickenlooper in June 2011. In early 2013, the marketplace was given the brand name “Connect for Health Colorado.”

Colorado’s marketplace is governed by a 12-member board (nine voting and three ex-officio) and led by CEO Kevin Patterson.

Colorado health insurance exchange links

Connect for Health Colorado
855-PLANS-4-YOU (855-752-6749)

State Exchange Profile: Colorado
The Henry J. Kaiser Family Foundation overview of Colorado’s progress toward creating a state health insurance exchange.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post Colorado health insurance marketplace: history and news of the state’s exchange appeared first on healthinsurance.org.

Utah’s short-term health insurance regulations

Utah Insurance Code 31A-1-301(172) defines a short-term health insurance plan as having an initial term of less than 12 months, and a total duration of no more than 36 months, including renewals or extensions. This lines up with the federal limits that apply to short-term health plans, under a rule change that was made by the Trump administration in late 2018.

It’s noteworthy, however, that Utah’s code has changed on this matter. As of late 2018, when the new federal rules were taking effect, Utah insurance code 31A-30-103(19) — which now refers to small employer carriers and no longer defines short-term health insurance — stated that a short-term plan was a nonrenewable policy with a duration of “less than 364 days.” As long as a plan met those standards, it was not subject to the “health benefit plan” rules in Utah.

The current statute also confirms that short-term plans are not considered health benefit plans (and are thus not subject to the rules that apply to such plans), but the definition has been expanded to allow Utah’s short-term health plans to be renewable and last up to three years if the insurer chooses to offer renewability.

There are state-based filing requirements for short-term health insurance in Utah, which are outlined here.

Short-term plans duration in Utah

The maximum initial term limit for short-term health insurance in Utah is under 12 months. If the policy is renewable, total duration can be up to 36 months. This aligns the state’s rules with the Trump Administration’s rules for short-term plans, which took effect in late 2018.

Proposed minimum standards for short-term health plans

In January 2021, the Utah Insurance Department proposed new minimum standards for short-term health insurance plans. The Department is accepting public comments until March 3, 2021, and the earliest possible effective date for the proposed changes is March 10, 2021.

The proposed rule change calls for several minimum coverage requirements on short-term plans, including a benefit cap of at least $1,000,000, and coinsurance/copayments that cannot exceed 50 percent of the covered charges. Most of the currently available short-term health plans in Utah already have benefit caps of at least $1 million, but there are some plans with benefit caps of $500,000.

Various inpatient services would have to be covered under the proposed minimum standards, including anesthesia, prescription drugs, imaging and lab services, etc. And various outpatient services would also have to be covered, including dialysis, office visits, physical/speech/occupational therapy, and diagnostic and lab services—but notably, not prescription drugs, unless it’s related to a surgical procedure.

And mental/behavioral health services would not have to be covered, nor would maternity care. These three benefit categories (outpatient prescriptions, mental health care, and maternity care) are often excluded on short-term health plans, and Utah’s proposed minimum standards would allow them to continue to be excluded.

Which companies offer short-term health insurance plans in Utah?

Several health insurance companies offer short-term medical insurance in Utah. Early in the COVID pandemic, the Utah Insurance Department asked all healthcare insurers in the state, including those offering short-term health plans, to complete a survey indicating how their plans would cover various scenarios related to COVID-19 costs. The survey responses are linked for each of the state’s short-term insurance companies:

• Independence American Insurance Company
• Life Map (COVID coverage survey response)
• National Foundation Life (COVID coverage survey response)
• National Health Insurance Company/National General (COVID coverage survey response)
• UnitedHealthcare/Golden Rule (COVID coverage survey response)
• Select Health (COVID coverage survey response)

SelectHealth also offers ACA-compliant major medical plans in Utah. In some states, there is no overlap between the insurance companies that offer short-term policies and those that offer ACA-compliant policies.

Who can get short-term health insurance in Utah?

Short-term health insurance in Utah can be purchased by residents who qualify under the underwriting guidelines of insurers. In general, this means being under 65 years old and in fairly good health.

Folks in Utah should consider that short-term health medical insurance plans typically include exclusions for all pre-existing conditions (typically a blanket exclusion for any pre-existing condition, rather than specific exclusion riders for each condition) so these types of plans are not adequate for someone who needs medical care for ongoing or pre-existing conditions.

It’s also important to understand that although short-term plans are often more affordable than regular major medical coverage (unless the person is eligible for a premium subsidy, in which case the major medical coverage might be less expensive), they have shortcomings that can result in much higher out-of-pocket medical costs if a serious health condition arises, even if it’s not related to a pre-existing condition.

Short-term healthcare plans do not have to cover the essential health benefits, and often exclude coverage for at least some of them (maternity care, prescription drugs, and mental health care are the most commonly excluded). In addition, short-term plans generally impose benefit caps on the total amount they’ll pay for your care.

If you’re in Utah and need health insurance, check to see if you’re eligible for a special enrollment period that would allow you to enroll in an ACA-compliant major medical plan (ie, an Obamacare plan). There are several qualifying life events that will trigger a special enrollment period and allow you to buy a plan through the health insurance exchange in Utah, and these plans will offer better coverage than a short-term health insurance policy.

ACA-compliant individual major medical plans (obtained through the exchange or directly from an insurance company) are purchased on a month-to-month basis, so you can enroll in a plan even if you only need coverage for a few months before another policy takes effect. And if your annual household income makes you eligible for a premium subsidy, you can receive the subsidy for the months you have coverage, even if it’s only a few months.

Should I consider short-term health insurance in Utah?

Although short-term health plans do not provide the level of protection that an ACA-compliant plan will provide, they’re better than having no coverage at all. And there are some scenarios in which they might be your only option or your only realistic option:

• If you missed open enrollment for ACA-compliant coverage and do not have a qualifying event to trigger a special enrollment period.
• If you’re newly employed and you’ve got a waiting period before your employer’s health plan takes effect (if you also have a qualifying event, you may be able to enroll in an ACA-compliant plan to cover you until your employer’s plan starts).
• If you’re losing coverage under another plan mid-month and enrolling in a new ACA-compliant plan using a special enrollment period, the new coverage typically cannot start sooner than the first of the following month. So you would have a gap in coverage from the day your plan ends until the start of the next month. A short-term health plan might be the only available option to fill that window, although if COBRA or state continuation coverage is available to you, you could use that option as your fall-back instead.
• If you’ll soon be enrolled in Medicare, but don’t have another coverage option before that point. Note that although Medicare covers pre-existing conditions, optional Medigap plans can require enrollees to wait up to six months for pre-existing condition coverage, if they didn’t have coverage for their pre-existing conditions prior to enrolling in Medicare.
• If you’re not eligible for Medicaid or a premium subsidy in the exchange, the monthly premium costs for an ACA-compliant plan might be unaffordable. People ineligible for premium subsidies include:
  • Anyone earning over 400% of the poverty level. (For 2021 coverage, that amounts to $51,040 for a single person. If your ACA-specific modified adjusted gross income is just a little above the subsidy-eligible threshold, there are steps you can take to reduce it).
  • People in the ACA’s family glitch. This happens when people are employed by businesses that provide affordable health coverage to employees, but require the cost of health benefits for family members to be fully or mostly payroll deducted, resulting in unaffordable total family premiums — and yet, the family members are also not eligible for premium subsidies to offset the cost of coverage purchased in the exchange.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Minnesota health exchange overview

Minnesota’s state-run exchange, MNsure, has five participating insurers for 2021, up from four in 2020. The exchange enrolled more than 122,000 people in individual market coverage for 2021.

As a result of the COVID-19 pandemic, MNsure joined most of the other state-run exchanges in offering a special enrollment period during which people who were uninsured could enroll in a health plan during the spring of 2020. Nearly 9,500 Minnesota residents enrolled in private plans through MNsure during this window, as well as another 13,700 who enrolled in MinnesotaCare or Medicaid (enrollment in those programs is open year-round for eligible residents).

Allison O’Toole, who led MNsure as CEO for three years, announced her resignation in March 2018, and the exchange named Nate Clark, the MNsure COO, as acting CEO. A few months later, the MNsure board named Clark as the permanent CEO. O’Toole left MNsure to work as director of state affairs for United States of Care, a non-profit created by Andy Slavitt, who was the acting administrator of CMS under the Obama Administration.

Throughout 2017, Minnesotans who bought their own health insurance (on or off-exchange) and weren’t eligible for ACA subsidies were provided with 25 percent premium rebates from the state as a result of S.F.1, signed into law by Governor Dayton in early 2017. The subsidies helped to offset the large premium increases that applied in Minnesota in 2017, and helped to stabilize the individual health insurance market in 2017. But the premium rebate program expired at the end of 2017.

Thanks in large part to the new reinsurance program that Minnesota created (details below), premiums decreased in Minnesota’s individual market in 2018, 2019, and again in 2020, although rates increased modestly for 2021. In May 2019, Minnesota leaders reached an agreement on a budget that included an extension of the reinsurance program through 2020 and 2021 (it has already been granted federal approval through the end of 2022, but the state has to continue to cover its share of the cost; Minnesota Governor Tim Walz had hoped to implement a premium subsidy program and a new tax credit in Minnesota starting in 2020. But a compromise in the budget ended up with the state opting to continue the existing reinsurance program for two more years instead.).

Open enrollment for 2021 health plans extended through December 22, 2020; Insurers implemented modest rate increases for 2021, after three years of overall rate decreases

MNsure enabled window shopping for 2021 health plans as of October 12, 2020. This gave residents a few weeks to browse the available plans before open enrollment started on November 1, 2020. And MNsure announced that open enrollment would continue through December 22, 2020, which was a week longer than the open enrollment period that applied in states that use the federally-run exchange; the flexibility to extend open enrollment is often cited as one of the benefits of having a fully state-run exchange. (MNsure had a similar extension in December 2019, for 2020 health plans).

For 2021, Quartz joined the Minnesota marketplace. Quartz already offered plans in Illinois and Wisconsin, and expanded into Minnesota for 2021. And two of the existing insurers — HealthPartners and UCare — expanded their coverage areas for 2021 (BluePlus and Medica already offered coverage statewide, and continue to do so in 2021).

The following average rate changes were approved for MNsure’s insurers:

• Blue Plus: 4.21 percent increase (down from an initially proposed 7.12 percent increase)
• Group Health/Health Partners (GHI): 0.67 percent increase (down from an initially proposed 4.15 percent increase)
• Medica: 2.42 percent increase (down from an initially proposed 7.06 percent increase)
• UCare: 1.6 percent increase (up from an initially proposed 1.39 percent decrease)
• Quartz: New for 2021, so no applicable rate change

PreferredOne Insurance Company, which offers plans outside the exchange, increased premiums by 1.05 percent (down from an initially proposed average increase of 5.09 percent).

Rate changes in previous years

Insurer participation in MNsure: 2014-2021

2014: Five insurers offered individual policies through MNsure for 2014: Blue Cross Blue Shield of Minnesota, HealthPartners/Group Health, Medica, PreferredOne, and UCare. Kaiser Health News reported that Minnesota offered some of the lowest premiums for silver (mid-level) plans in the U.S. Four of Minnesota’s nine regions made Kaiser’s list of the 10 least expensive places to buy health insurance.

2015: But PreferredOne, which offered the lowest rates in the nation in 2014 and captured a large portion of 2014 enrollees, withdrew from MNsure for 2015. PreferredOne said remaining on the exchange was “not administratively and financially sustainable.” A Star Tribune business writer attributed PreferredOne’s departure as a market dynamics issue rather than a problem with MNsure.

However, Blue Plus (an affiliate of Blue Cross Blue Shield of MN, offering HMO plans) joined the exchange for 2015, so there were still five insurers offering plans for 2015: Blue Cross Blue Shield of Minnesota, Blue Plus, Health Partners/Group Health, Medica, and UCare. MNsure offered 84 plans statewide, up from 78 for 2014.

2016: BCBSMN, Blue Plus, Health Partners/Group Health, Medica, and UCare offered individual market plans through MNsure for 2016.

2017: In an effort to recruit more carriers to offer plans through MNsure for 2017 — particularly outside the Twin Cities metro area — state regulators sent out a request for proposals from health insurers on August 15, 2016. Regulators noted that insurers could propose waivers of regulations in order to make it feasible for them to offer coverage through MNsure, although any such waiver requests would have to be approved by regulators.

Steven Parente, a health insurance expert at the University of Minnesota, called the state’s effort to recruit insurers to MNsure a “distress call” and noted that August 15 is awfully late in the year to be putting out a request for insurer participation, given that open enrollment begins November 1. And ultimately, no new insurers opted to join MNsure for 2017.

Blue Cross Blue Shield of MN dropped their individual market PPO plans at the end of 2016 due to significant financial losses. That left Blue Plus (which offered HMOs and covered roughly 13,000 people in 2016 in the individual market) as the only BCBSMN affiliate in the exchange. Roughly 103,000 people had to select new plans during open enrollment.

Most of those BCBSMN enrollees had off-exchange coverage, though. There were only about 20,400 MNsure enrollees (a little more than one in five MNsure enrollees) with coverage under BCBSMN who needed to switch to another plan during open enrollment. BCBSMN had individual PPO options available in all 87 counties in Minnesota through MNsure in 2016, while the Blue Plus coverage area — comprised of four separate HMO networks — was available in 77 of the state’s counties.

Nationwide, carriers have been shifting away from PPOs and towards HMOs and EPOs. In Colorado, Anthem Blue Cross Blue Shield also dropped their PPOs at the end of 2016. In Indiana, there were no PPOs available in the individual market by 2017. Blue Cross Blue Shield of New Mexico dropped all of their individual market plans at the end of 2015 except one off-exchange HMO. Blue Cross Blue Shield of Texas dropped their individual market PPO plans at the end of 2015.

Minnesota does still have PPO options available however. There are PPOs offered by Blue Cross Blue Shield of Minnesota and HealthPartners for 2021.

The broad network offered by PPOs tends to be attractive to enrollees who have health problems; they’re often willing to pay higher premiums in trade for access to broad network of hospitals and specialists. But PPOs are expensive for carriers, as enrollees don’t need primary care referrals to see specialists, and it’s more challenging for carriers to hold down costs when there are more providers in the network.

All of the MNsure carriers except Blue Plus are also limiting their total enrollment for 2017. By November 11, 2016, less than two weeks into open enrollment for 2017 coverage, Medica had hit their 50,000 member enrollment cap for 2017 (including on and off-exchange enrollments, and also accounting for expected renewals of 2016 Medica plans), and their policies were no longer available in the individual market in Minnesota, on or off-exchange. The only exception was five counties (Benton, Crow Wing, Mille Lacs, Morrison, and Stearns) where Medica agreed not to limit enrollment, as all of the other available carriers in those counties have imposed enrollment caps too. In those five counties, Medica plans continued to be available.

At that point, Medica’s market share in MNsure for 2017 stood at 34.2 percent. By December 14, Medica’s market share had dropped to 27.7 percent, as enrollments had continued to climb for the remaining carriers.

On January 31, Medica re-opened enrollment for 2017. This was because a smaller-than-expected number of 2016 Medica enrollees renewed their plans for 2017, meaning that the carrier still had some wiggle room under their 50,000 member cap; at that point, they had room for about 7,000 more enrollees. Medica plans were thus available throughout the duration of the special enrollment period that was added on at the end of open enrollment, and continue to be available for people with qualifying events.

2018: Plans continued to be available from Blue Plus, Health Partners/Group Health (GHI), Medica, UCare. In the months before a decision was reached regarding an extension of the open enrollment window for 2018 plans (the first year that the federal government imposed a shorter, month-and-a-half enrollment window), two of MNsure’s participating insurers had differing positions: UCare believed the exchange should add an additional two-week special enrollment period, while Medica did not want the exchange to have the option to extend the newly-scheduled six-week enrollment window. Notably, Medica capped their enrollment very early during the 2017 open enrollment period, and while UCare also had an enrollment cap, it was set with a target of nearly doubling their 2016 enrollment. But Medica is the only MNsure insurer that didn’t set an enrollment cap for 2018.

As was the case for 2017, enrollment caps were used in the individual market in Minnesota for 2018 by all insurers other than Medica (Medica did have an enrollment cap for 2017, which they hit very early in open enrollment; however, they resumed enrollments at the end of January 2017). Details about the insurers’ enrollment caps are in the plan binders in SERFF. For 2018, MNsure insurers implemented the following enrollment caps:

• Blue Plus: 55,000 member cap (aiming for a target of 50,000 effectuated enrollees, but effectuated enrollment is always lower than the number of people who initially enroll)
• Health Partners/Group Health (GHI): 73,400 member cap (aiming for a target of 70,000 effectuated enrollees)
• Medica: no enrollment cap
• UCare: 35,000 member cap (aiming for a target of 30,000 effectuated enrollees)

MNsure confirmed in May 2018 that none of their insurers had hit their enrollment caps for 2018.

Outside the exchange, PreferredOne had an enrollment cap of 3,000 members, although their 2017 membership was only about 300 people.

2019 and 2020: Blue Plus, Health Partners/Group Health, UCare, and Medica have continued to offer plans through MNsure, and all of them continued to participate in 2020 as well. Blue Plus expanded to once again offer statewide coverage in 2020, for the first time since 2016.

2021: Quartz joined the exchange for 2021, joining the four existing insurers. HealthPartners and UCare both expanded their coverage areas for 2021.

Minnesota Premium Security Plan: 1332 waiver proposal approved by CMS, but with a significant funding cut for MinnesotaCare

In May 2017, Minnesota Governor Mark Dayton submitted a 1332 waiver proposal to CMS. The 1332 waiver was based on H.F.5, which was enacted without Dayton’s signature in April 2017 (Dayton had proposed an alternative measure that would have allowed people in Minnesota to buy into MinnesotaCare; that measure was not able to pass the state’s Republican-dominated legislature).

[For more than two decades, MinnesotaCare was a state program subsidizing health insurance for low-income residents.  As of January 1, 2015, it transitioned to a Basic Health Program under the ACA, becoming the first BHP in the nation.]

H.F.5 created the Minnesota Premium Security Plan (MPSP), which is a state-based reinsurance program (similar to the one the ACA implemented on a temporary basis through 2016, and that Alaska created for 2017; several other states have since implemented reinsurance programs). The reinsurance program, which took effect in Minnesota in 2018, covers a portion of the claims that insurers face, resulting in lower total claims costs for the insurers, and thus lower premiums (average individual market premiums in Minnesota decreased from 2017 to 2018 as a result of the reinsurance program). The reinsurance kicks in once claims reach $50,000, and covers them at 80 percent up to $250,000 (this is similar to the coverage under the transitional reinsurance program that the ACA provided from 2014 through 2016).

H.F.5 was contingent upon approval of the 1332 waiver, because it relies partially on federal funding, in addition to state funding. Under the federal approval that was granted in September 2017, the federal government is giving Minnesota the money that they save on premium tax credits, and that money is combined with state funds to implement the reinsurance program (lower premiums — as a result of the reinsurance program — result in the federal government having to pay a smaller total amount of premium tax credits, since the tax credits are smaller when premiums are smaller).

It was expected that CMS would approve the state’s 1332 waiver proposal, and Governor Dayton requested that the approval process be swift so that the state could move forward with the implementation of the Minnesota Premium Security Plan in time for the 2018 plan year. Dayton indicated that his office had been told that approval would come in August 2017, but CMS didn’t approve the waiver until September 22. And the waiver approval letter noted that the federal savings for MinnesotaCare (the state’s Basic Health Program, or BHP) resulting from the reinsurance program would not be eligible to be passed along to the state — in other words, CMS would keep those savings instead.

[Federal BHP funding is equal to 95 percent of the amount that the federal government would have otherwise spent on premium subsidies and cost-sharing reductions for the population that ends up being eligible for the BHP. So lower premiums — as a result of reinsurance — for qualified health plans in the exchange means that the amount the federal government would have had to spend on premium subsidies for that population is lower. That translates into a smaller amount of funding for the state’s BHP, according to the approach that HHS took for Minnesota’s waiver approval.]

And based on the scathing letter that Dayton sent CMS a few days earlier, it appeared at that point that Minnesota could actually lose money on the deal — losing more in federal funding for MinnesotaCare than they gain in reinsurance funding. Dayton noted in his letter that the 1332 waiver approval process had been “nightmarish,” and that Minnesota went to great lengths to follow instructions from CMS at every turn, throughout the process of drafting H.F.5 and the 1332 waiver proposal. He explains that CMS provided Minnesota with explicit guidance in terms of how to draft the reinsurance program while maintaining full federal funding for MinnesotaCare, and highlighted the fact that the state never deviated from the instructions that were provided.

The StarTribune editorial board called out then-Secretary of HHS, Tom Price and the Trump Administration for their lack of clarity on the issue, for apparently misleading the state during the 1332 waiver drafting process, and for effectively punishing the state of Minnesota for taking an innovative approach to ensuring that as many people as possible have health insurance.

Insurers filed rates based on reinsurance being available. And by the time the waiver was approved, there was very little time to evaluate the potential impacts of the funding changes, as rates had to be finalized by October 2 in Minnesota. The finalized rates did incorporate the reinsurance program; the state has accepted the approved waiver, but Gov. Dayton sent a letter to HHS on October 3, asking them to reconsider the MinnesotaCare funding cuts, but the issue has remained unresolved.

Elimination of CSR funding results in additional funding cut for MinnesotaCare, but a lawsuit has partially restored that funding

Nationwide, 54 percent of exchange enrollees benefit from cost-sharing subsidies. But in Minnesota, only 13 percent of exchange enrollees are receiving cost-sharing subsidies. This is because of MinnesotaCare, which covers all enrollees with income up to 200 percent of the poverty level. That’s the same group that would otherwise benefit the most from cost-sharing subsidies, so the fact that MinnesotaCare is available means that most of the people who would otherwise be enrolled in cost-sharing subsidy plans are instead enrolled in MinnesotaCare.

At first glance, this would appear to have made the uncertainty surrounding cost-sharing subsidy funding in 2017 a little less of a pressing issue in Minnesota than it was in many other states, since private insurers weren’t facing the sort of losses that insurers in other states were facing without federal funding for CSR. But when the Trump Administration eliminated federal funding for CSR in October 2017, HHS took the position tha t since CSR funding had been eliminated, the CSR portion of the federal funding for the BHPs in New York and Minnesota would be reduced to $0. This was not a cut-and-dried conclusion, however, as explained earlier in 2017 by Michael Kalina.

In January 2018, the Attorneys General for New York and Minnesota filed a lawsuit against the US Department of Health and Human Services, seeking to restore funding for their Basic Health Programs. A judge ruled in favor of the states in May 2018, ensuring that MinnesotaCare would continue to receive at least some CSR-based funding. The amount awarded to the state for the first quarter of 2018 was just over half of what the state had initially expected in CSR-related funding, but a larger chuck of the funding was restored later in 2018. According to the Star Tribune, however, Minnesota still ended up losing $161 million in federal funding for MinnesotaCare due to the CSR funding cuts.

In early 2019, the Trump administration proposed yet another funding cut (a third, after the cuts imposed by the reinsurance program and the elimination of CSR funding) as part of a new methodology for calculating BHP funding. This one was much smaller than the other two cuts, but taken together the funding reductions are pushing MinnesotaCare towards a looming budget shortfall.

SHOP exchange: down to one carrier as of 2016, zero by 2018 (and still zero in 2019)

In 2015, there were two carriers in MNsure’s SHOP exchange for small businesses: Blue Cross Blue Shield of Minnesota, and Medica. But Medica announced in 2015 that they would exit the SHOP exchange in Minnesota, North Dakota, and Wisconsin at the end of the year. That left BCBS as the only small group carrier available through MNsure in 2016, but it didn’t change much from a practical standpoint, since 83 percent of MNsure’s small groups were enrolled in plans through BCBS in 2015. Indeed, Medica’s reason for exiting the small business exchange was based on low enrollment in the first two years.

Blue Cross Blue Shield of Minnesota continued to be the only insurer offering SHOP coverage via MNsure in 2017, but announced in July 2017 that they would no longer offer SHOP coverage in 2018, and would instead transition their SHOP enrollees to small business coverage outside the exchange. At that point, there were only 3,287 people enrolled in SHOP coverage in Minnesota — far below the 155,000 people that were originally projected to have coverage through MNsure’s SHOP program by 2016 (this much lower-than-anticipated enrollment has been the case in nearly every state’s SHOP exchange; this situation is not unique to Minnesota).

State law provided 25% premium rebate in 2017; amendment to allow plans without essential benefits was cut from final legislation

Throughout 2016, then-Governor Dayton called for a state-funded premium rebate for people who buy their own insurance but aren’t eligible for the ACA’s premium subsidies (those are only available for people with income up to 400 percent of the poverty level, or $100,400 for a family of four in 2019).

Governor Dayton also noted that the government needed to act quickly to stabilize the individual market in Minnesota, and by late November 2016, his patience with lawmakers was wearing thin. In a November 23 press conference, Dayton said that House Republicans needed to “stop dilly-dallying” and decide whether to move forward with Dayton’s rebate proposal.

Dayton had also indicated that he was considering calling a special session of the legislature after election day to address the situation, and that was being negotiated for December 20. But the talks fell through when Dayton and Republican House Speaker Kurt Daudt couldn’t agree on the three bills that would have been addressed in the special session; as a result, there was no special session.

Instead, the issue was taken up by lawmakers as soon as the 2017 legislative session began. On January 5, Minnesota Senators Michelle Benson (R, 31st District) and Gary Dahms (R, 16th District) introduced S.F.1. The bill called for using $300 million in state funding to provide a 25 percent rebate to roughly 125,000 people in Minnesota.

S.F.1 passed the Minnesota Senate by a 35-31 vote on January 12. Only one DFL Senator (Melisa Franzen, from Edina) voted with Republicans in favor of the legislation. It was then sent to the House, where an amendment was added that stripped out the requirement that health plans provide various mandated benefits (see “Journal of the Day” section “Top of page 154” in this version of the bill; under the terms of the amendment, as long as a carrier offered at least one plan with all the mandated benefits, they would have been allowed to offer others without mandated benefits).

The amended bill was sent back to the Senate on January 23; differences between the bills that the two chambers passed had to be reconciled before being sent to Governor Dayton for his signature. By that point, the amendment to allow less-robust plans to be sold had garnered national attention, and public outrage helped to push lawmakers away from the provision. S.F.1 had also called for $150 million to be appropriated for fiscal year 2018 (through June 30, 2019) from the state general fund to a state-based reinsurance program to stabilize the individual market (Alaska did something similar in 2016, preventing a market collapse), but that provision was also removed in the final version (Minnesota did ultimately set up a reinsurance program, effective in 2018, which has served to stabilize the market and reduce premiums).

A Conference Committee in the Senate recommended that the House “recede from its amendments” and the Conference Committee report passed the Senate on a 47-19 vote. The House passed the bill a few hours later, 108-19. It was sent to Governor Dayton, who immediately signed it into law. DFLers did have to compromise on one issue during the process: S.F.1 allows for-profit HMOs to begin operating in Minnesota’s individual market, which had long been limited to non-profit HMOs.

Consumers were told to expect the premium rebates to show up by April 2017, but they were retroactively effective to January 2017. So a person who had been paying full price for a plan since January 2017 saw a substantial premium reduction on the April or May invoice. Going forward, for the remainder of the year, a 25 percent rebate applied each month.

Since S.F.1 was signed into law with only a few days remaining in open enrollment (it ended January 31 that year), Governor Dayton and exchange officials were worried that there wouldn’t be enough time for people to learn about the rebate and apply for coverage before January 31. In December, Dayton had asked HHS to allow MNsure to extend its enrollment deadline to February 28 (instead of January 31) in order to allow lawmakers more time to work out the details of a state-based premium rebate while still allowing people to enroll after the legislative process is complete.

HHS denied the request for a blanket extension, but MNsure used their own authority on January 28 to grant a one-week special enrollment period (February 1 to February 8) due to exceptional circumstances. Although the state-based 25 percent premium rebate was available on or off the exchange, the one-week extension was only valid through MNsure; health insurers did not have to accept off-exchange enrollments without a qualifying event after January 31.

The 25 percent premium rebate program in Minnesota was only authorized for one year, so the rebates did not continue into 2018. And although almost 100,000 people received premium relief through the program in 2017, it ended up costing less than the legislature had allocated, and about $100 million was returned to the state’s budget at the end of 2017.

Protecting Medicaid enrollees from estate liens

In every state, Medicaid is jointly funded by the state and the federal government. Longstanding federal regulations, which predate the ACA, require states to “seek recovery of payments from the individual’s estate for nursing facility services, home and community-based services, and related hospital and prescription drug services” for any Medicaid enrollee over the age of 55. This applies essentially to long-term care services, but states also have the option to go after the individual’s estate to recover costs for other care that was provided by Medicaid after age 55.

Prior to 2014, this wasn’t typically an issue, as Medicaid eligibility was generally restricted by asset tests or requirements that applicants be disabled or pregnant (although Minnesota did have much more generous Medicaid eligibility guidelines than most states prior to 2014). But as of 2014, in states that expanded Medicaid under the ACA, the only eligibility guideline is income. Applicants with income that doesn’t exceed 138 percent of the poverty level are directed to Medicaid, regardless of any assets they might have.

When applicants use the health insurance exchange — MNsure in Minnesota — they’re automatically funneled into Medical Assistance (Medicaid) if their income is under 138 percent of the poverty level. But what these enrollees didn’t know was that the state also had a program in place to put liens on estates for Medicaid-provided services for people age 55 and older.

The combination of these systems caught numerous residents off guard. They were enrolled in Medical Assistance through MNsure based on their income, but were not aware that liens were being placed on their homes so that the state could recoup the costs upon their deaths.

State Senator Tony Lourey (DFL, District 11) addressed the issue with language included in HF2749, the Omnibus supplemental budget bill, which was signed into law by Governor Dayton on June 1, 2016. The legislation limits estate recovery to just what’s required under federal Medicaid rules (ie, essentially, long-term care costs for people age 55 or older), and makes the provision retroactive to January 1, 2014.

Early tech struggles

MNsure opened for business in the fall of 2013, but technological issues persisted well into 2015, despite numerous improvements throughout 2014. Given MNsure’s difficult launch, the state conducted a series of audits and reviews.  The first audit reviewed how MNsure spent state and federal money. Auditors concluded that the exchange has generally adequate internal controls and found no fraud or abuse. The review was conducted by the state Office of the Legislative Auditor, and the report was published in October 2014.

Another audit, also conducted by the Office of the Legislative Auditor and released in November 2014, found that the MNsure system in some cases incorrectly determined who qualified for public health benefits. The errors occurred during the first open enrollment period, before a series of system fixes were implemented. The audit did not quantify the total financial impact of the errors. The state Human Services commissioner said a consultant working on technical fixes to MNsure concluded that the eligibility functionality was working correctly as of June 2014.

A third audit, a performance evaluation report released in February 2015, said “MNsure’s failures outweighed its achievements.” Among other criticisms, auditors said MNsure staff withheld information from the board of directors and state officials, the enrollment website was seriously flawed and launched without adequate testing, and the first-year enrollment target was unrealistically low.

In April 2014, MNsure hired Deloitte Consulting to audit MNsure’s technology and improve the website to make enrolling in coverage and updating life events easier and more streamlined. Deloitte has been involved in successful state-run marketplaces for Connecticut, Kentucky, Rhode Island and Washington.

Software upgrades were installed in August 2014, and system testing continued right up until the start of open enrollment. To reduce wait times for consumers and insurance professionals, MNsure increased its call center and support staff and launched a dedicated service line for agents and brokers.

More in-person assisters were available in Minnesota for the 2015 open enrollment period. MNsure encourages residents to utilize the exchange’s assister directory to find local navigators and brokers who can help with the enrollment process.

MNsure has improved dramatically in terms of its technology since the early days of ACA implementation, and enrollment increased every year from 2014 through 2019.

Lawmakers approved switching to HealthCare.gov as of 2019, but governor vetoed

On May 9, 2017, lawmakers in Minnesota passed SF800, an omnibus health and human services bill. Among many other things, the legislation called for switching from MNsure to the federally-run marketplace (HealthCare.gov) starting in 2019 (see Section 5). But Governor Dayton vetoed it.

Gov. Dayton has long been supportive of MNsure, and had previously clarified that he would veto the bill. In noting his plans to veto the legislation, Dayton made no mention of the transition to HealthCare.gov that was included in the legislation, but focused instead on the sharp budget cuts in the bill. But his veto ensured that MNsure would remain in place, at least for the time being.

The Senate’s original version of SF800 did not call for scrapping MNsure, but the bill went through considerable back-and-forth between the two chambers, and the version that passed was the 4th engrossment of the bill.

In March 2015, Dayton had asked the legislature to create a Task Force on Health Care Financing that would study MNsure along with possible future alternatives. Dayton noted in his letter that he supported making MNsure “directly accountable to the governor and subject to the same legislative oversight as other state agencies” and his budget included half a million dollars devoted to the task force. The spending bill was approved by the legislature in May, and the 29-member task force was appointed in the summer.

One of the possibilities that the task force considered was the possibility of switching to Healthcare.gov, but it’s clear that there was no cut-and-dried answer to the question of whether Minnesota is better served by having a state-run exchange, switching to a federally-run exchange, or teaming up with the federal government on either a supported state-based marketplace or partnership exchange.

In a December 2015 meeting of the task force, the MN Department of Human Services presented a financial analysis of the alternatives available to MNsure. They determined that switching entirely to Healthcare.gov would cost the state an additional $5.1 million in one-time costs from June 2016 to June 2017. And switching to a supported state-based marketplace would cost an additional $6.6 million during that same time frame. If the state had opted to switch to Healthcare.gov, the soonest it could have happened was 2018, since HHS requires a year’s notice from states wishing to transition to Healthcare.gov, and Minnesota wouldn’t have been in a position to make a decision until sometime in 2016.

There were significant reservations about making that switch prior to the Supreme Court’s ruling on King v. Burwell. The Court ruled in June 2015 that subsidies are legal in every state, including those that use Healthcare.gov. Prior to the decision, a switch to Healthcare.gov could have jeopardized subsidies for tens of thousands of Minnesota residents. But once it was clear that Healthcare.gov’s subsidies are safe, some stakeholders began calling for Minnesota to scrap its state-run exchange and use Healthcare.gov instead. Because the MNsure task force was included in the 2016 budget, no hasty decisions were made.

In January 2016, the task force submitted their recommendations to the legislature. They covered a broad range of issues, but did not recommend that MNsure transition to the federal enrollment platform. Lawmakers essentially left the exchange alone during the 2016 legislative session.

The magnitude of the 2016 rate increases that were announced in October resulted in MNsure opponents renewing their calls to switch to Healthcare.gov. But it’s important to keep in mind that the 41 percent weighted average rate hike in Minnesota was market-wide, and did not just apply to MNsure enrollees. In fact, the off-exchange carrier (PreferredOne) had among the highest rate hikes in the state for 2016, at 39 percent, and the exchange’s weighted average rate increase (38.5 percent) was lower than the weighted average rate increase for the whole individual market (41 percent).

Minnesota health insurance exchange links

MNsure
855-3MNSURE (855-366-7873)

State Exchange Profile: Minnesota
The Henry J. Kaiser Family Foundation overview of Minnesota’s progress toward creating a state health insurance exchange.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post Minnesota health insurance marketplace: history and news of the state’s exchange appeared first on healthinsurance.org.

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