Colo. begins task of setting up health-insurance exchanges |

Colo. begins task of setting up health-insurance exchanges

Years into the colossal debate about how to reach the millions of people without health insurance, all the talk is turning into something real in Colorado conference rooms packed with insurance executives, advocates for the sick and disabled, and average folks who want better care.

They are the brains behind one of the most complicated tasks in national reform: building a state insurance exchange.

In simplest terms, the exchange will operate sort of like an Expedia or Travelocity website for booking airlines and hotels, only more helpful.

The goal: a one-stop shop for health insurance where a person can find out whether they qualify for a government insurance plan such as Medicaid or a federal subsidy to meet monthly premiums, and then sign up for it immediately. A spot – either physical or online – where it’s easy to compare plainly written plans so there are no surprises about what is covered, and where the price of each plan is transparent.

“Think of what Expedia did for transparency in the airline market,” said Anne Warhover, president of the Colorado Health Foundation. “You say, ‘This is what I’m looking for – give me my options, my cost.’ “

For those people who buy insurance individually or small-business owners who shop for plans for a handful of employees, the current options are calling a broker, searching online or asking insurance companies for quotes.

At first, those not receiving health insurance benefits through work, and particularly the uninsured, could use the exchange, which the federal government mandates must open by 2014. Eventually, even businesses with more than 100 employees could shop the exchange for large- group plans.

“It’s up to us to do a good job of designing this,” said Elisabeth Arenales, health policy analyst with the Colorado Center on Law and Policy. “Now, when you shop for health insurance, there are lots of different plans – how do you compare? We ought to be able to construct this so that it becomes easier.”

Most likely, a nonprofit will run the exchange, though it’s possible it would operate under some state control. It’s also possible Colorado could join a regional exchange – Utah, New Mexico and Wyoming already have asked – but state leaders say they first must come up with a plan to see whether Colorado’s goals would mesh with other states’.

By Sept. 1, Colorado must apply for a slice of $52 million available nationally for states to design their exchanges. The federal government will hand out more grant money in the next two years to put state plans into action. In states that do not create an exchange, the federal government will build one for them.

An estimated 300,000 of the 700,000 or more uninsured Coloradans will qualify for government subsidies to pay for insurance, part of federal reform that requires everyone to have coverage. Families with incomes up to four times the federal poverty level – about $88,000 for a family of four – will qualify.

Up to 230,000 additional Coloradans will qualify for Medicaid in 2014 when eligibility is expanded, said Lorez Meinhold, Gov. Bill Ritter’s health care policy expert. People with incomes below 133 percent of the federal poverty level – that’s now about $22,000 for a family of four – could sign up for Medicaid.

The state is holding a series of community forums to plan the exchange, with the next scheduled for Aug. 30.

During a recent forum at National Jewish Health, organizers attempted to balance concerns from the insurance industry that the exchange could become a financially insolvent pool of the sickest people alongside pleas from advocacy groups to force insurers to provide robust policies, covering mental-health therapy and home care.

Details aren’t decided, but reform requires the exchange to offer plans ranging from bronze to platinum.

For their part, insurance executives are developing plans they would offer on the exchange. To remain solvent, plans sold on the exchange must parallel those sold privately, said Dr. Jandel Allen-Davis, vice president of government and external relations for Kaiser Permanente.

“You want plans to remain solvent . . . so they won’t go out of business,” she said.

Still, the exchange must make “significant disruptions” in the current insurance market to make sure insurers are providing coverage that people need, not just the cheapest plans available.

“Is this exchange really about coverage or is it really about care?” Allen-Davis asked.

The exchange should not only provide quotes and connect people to government aid if they are eligible, but guide them to pick out an appropriate plan, stakeholders said. That help is particularly needed for people who don’t have insurance.

“These are the people who are not here,” said Dr. Lynn Parry, a Denver neurologist who attended last week’s forum. “How do you help them make a choice about a benefit plan? The plan you thought was so good because it was so cheap might not have anything to help you.”

Reform advocates planning the exchange want to guard against “adverse selection.” They fear the pool, because of the way plans are designed, will draw the sickest people and leave the healthiest for the private market.

Also, they want an easy transition for those in the exchange whose incomes might fluctuate, causing them to shift from Medicaid to government-subsidized coverage. Those people shouldn’t have to go through gaps in health care or even switch doctors, they argue.

“We’ve just got to be very careful we are on top of that,” said Arenales, with the Center on Law and Policy.

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