MedicalMeeker HC 06 Scaled

Colorado officials are accused of unfairly promoting a Polis health insurance policy

The Colorado Option, the new health insurance program that seeks to give people better coverage at lower prices, is the result of years of work by Democratic lawmakers, state officials and advocacy groups to prove that a more consumer-friendly insurance plan can be a winner in the free market.

But now health insurance brokers say the state is unfairly trying to tilt that playing field in the Colorado option’s favor.

The controversy has to do with plans offered to people who buy health insurance on their own and whose current insurance companies leave the state.

Two carriers — Bright Health and Oscar Health — are pulling out of Colorado for 2023. Combined, about 50,000 people bought a Bright or Oscar plan this year on Connect for Health Colorado, the state’s online insurance exchange. Those people will have to choose a new plan with a new insurance company for 2023.

When they log into their account on Connect for Health to make that choice, the platform will give them a “suggested plan” that they can sign up for with just a few clicks. The proposed plans this year are all Colorado Option Plans, a request the state Department of Insurance made to Connect for Health officials.

The Colorado Option, created by the legislature last year, is a government-designed health insurance plan that offers a standardized set of benefits. These are then priced and sold on the open market by private insurance companies at premium rates that are required by law to eventually fall to 15% below 2021 levels, taking inflation into account. If prices don’t drop enough, the state insurance commissioner will be able to step in and dictate hospital prices to meet the premium reductions.

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Gov. Jared Polis delivers his big idea — about a statewide “public option” health insurance plan — to the audience at The Colorado Sun’s Big Ideas 2020 Forum at the Cable Center on the University of Denver campus on January 14, 2020 (Eric Lubbers, The Colorado sun)

The Division of Insurance was heavily involved in advocating for and creating the Colorado Option, which is a signature policy achievement of Governor Jared Polis and Democrats in the state legislature. State Insurance Commissioner Michael Conway, who heads the Division of Insurance, is a Policy Appointee. So, giving a boost to Colorado option plans can be seen as interfering with the free market to make a political initiative more successful.

“All of this to me is an obvious attempt to steer people into the Colorado option, whether it’s a better fit for them or not,” Brad Niederman, a health insurance broker, said at a meeting last month of the Connect for Health Board.

“A much more cumbersome process”

In most counties, Colorado option plans are not the least expensive this year. That means consumers just looking for the lowest-cost plan could sign up for something more expensive than they intended if they go with the proposed plan, health insurance brokers say.

“Colorado option plans are more expensive than (other) plans when most people are shopping on price,” said Meagan Fearing, a broker and the president of the Colorado State Association of Health Underwriters, a brokerage group.

Fearing said she did one quote for a client in El Paso County and found 10 to 15 plans that were cheaper before settling on a Colorado option plan.

If consumers want to purchase a plan that is not the proposed plan, they must go all the way back through Connect for Health’s system and re-enter their financial information.

“It’s a much more cumbersome process,” Fearing said.

Choosing the proposed plan may also mean changing doctors. Connect for Health used an algorithm to match each Bright and Oscar consumer with a new plan. In Connect for Health parlance, this is called “mapping” or creating a “crossroads.”

The algorithm took into account a carrier’s service area, resulting in a broad geographic analysis of the state. Bright customers in the Denver metro area, for example, were mapped to Colorado Option plans offered by Kaiser Permanente.

But Kaiser has its own network of doctors and clinics, while Bright used Centura’s network. If a Bright customer chooses the proposed Kaiser Permanente plan in the Denver metro area, they almost certainly won’t be able to keep their doctor, Fearing said.

The proposed plan algorithm also does not take into account the specific prescription drugs a person needs or the specific hospitals they want to use.

“With this mapping, in my strong opinion, we are doing our Connect for Health Colorado customers a great disservice,” Niederman, the broker, said at the Connect for Health board meeting.

Representatives for insurance companies said they were also baffled by the process.

“We just found it very confusing and didn’t understand how the intersection was determined,” Amanda Massey, the executive director of the Colorado Association of Health Plans, an insurer trade group, said at the board meeting.

Massey declined to comment further.

State says better communication was needed

Fearing is not on the Connect for Health board, but she sits on an advisory group for the board. She said the issue of favoring Colorado option plans was never brought to that group’s attention, calling the lack of communication a travesty.

“We should have talked about this much sooner,” she said.

Conway, the insurance commissioner, agreed and apologized during the Connect for Health board meeting.

“It’s on me. It’s my fault for not sharing that we did talk about these things,” he said.

The issue was partly one of timing, state officials said. While the state had more notice that Oscar would withdraw, Bright’s announcement of his departure came only a few weeks before open enrollment began.

“We were just literally trying to figure out who was going to stay on the exchange and who was going to leave,” Kevin Patterson, the CEO of Connect for Health, said in an interview.

Connect for Health has previously offered suggested plans, but that usually happens when an insurer discontinues a particular plan — think of a car company deciding to discontinue a particular model. In those cases, the proposed plan offers another choice within the same insurer, resulting in little disruption.

But the departure of Oscar and Bright marks the first time in seven years that a carrier has completely exited the individual market in Colorado. This meant that Connect for Health’s methods of suggesting a new plan from another carrier were rusty.

Patterson called the mapping system “by far one of the most imperfect processes we have” and said officials and other stakeholders need to talk more about how it should work.

“We have to think about this from a trade-off perspective — do we want to be in a position where we’re picking winners and losers?” he said.

A previous attempt to boost the Colorado option

This is not the only case of the Division of Insurance and Connect for Health trying to increase Colorado option plans this year. There was also a previous attempt, which involved how plans were sorted on the exchange.

There are 166 health insurance plans being sold on the exchange this year, divided between various insurance companies, provinces and bronze, silver and gold levels. This makes for a sometimes confusing bunch of options on the stock market.

To better organize the chaos, Connect for Health creates a sorting system called “preferred display.” In most years, the preferred display favors lower premium prices, so the cheapest plans are what people looking for coverage will see first — although the exchange has other options for sorting plans. Think of it like the results that appear on the first page of a Google search.

But when open enrollment kicked off this year, Connect for Health, at the request of the Division of Insurance, gave Colorado option plans top billing in the preferred display.

Conway, the insurance commissioner, said the goal in prioritizing Colorado option plans was to help people better compare coverage. Because the Colorado Option is built on a standardized benefit design — meaning what people get out of their coverage must be the same across all Colorado Option plans — Conway said it makes it easier for people to shop around because all they need have to consider is price and the plan’s provider network of doctors and hospitals.

“We want consumers to know when they’re looking at Colorado option plans that it’s an apples-to-apples comparison,” Conway said in an interview.

The decision to highlight Colorado Option plans in the preferred display provided the reason to also make Colorado Option plans the suggested plans for Bright and Oscar customers, Conway said.

But, after criticism, the state backtracked on preferred billing for Colorado Option plans, instead reverting to sorting plans by premium price. By then it was too late to change the proposed plans.

“We’re off the runway to actually change anything from a technology standpoint,” Patterson said.

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Colorado Insurance Commissioner Michael Conway speaks at a public forum in Frisco on February 21, 2020. (John Ingold, The Colorado Sun)

Conway, however, said he hopes to push again next year for preferential screening for Colorado option plans, reiterating that he believes the plans offer the clearest opportunity to compare coverage. Sorting plans only by premium price gives carriers an incentive to underprice their plans in hopes of getting more people to sign up, Conway said. This can lead to unsustainability that causes more carriers to falter.

Highlighting Colorado option plans will give consumers a broader view across all insurers, he said.

“I think it’s good for the market and also good for the sustainability of the market,” he said at last month’s Connect for Health board meeting.

Encouraging consumers to shop

The dispute has left lingering questions and frustrations. But people on all sides of the issue agree that the complexity of the situation shows why consumers seeking insurance in the individual market need to be proactive shoppers this year.

Fearing, the president of the state’s brokerage group, said people should consider using a broker to help navigate the system and make sure they get a plan that meets their needs.

“Don’t just click through the path of least resistance,” she said.

Patterson also stressed the importance of shopping.

“This year is more important than last year to make sure you buy,” Patterson said. “There are just so many big things moving around.”

But at last month’s Connect for Health board meeting, some members questioned how this encouragement of malls with the idea of ​​offering proposed plans.

“If you’re a member and you see something pop up in your inbox that says (Connect for Health) has a plan that’s a suggested match for your other plan, that carries weight,” said Marc Reece, vice chairman of the board, who also serves as the senior director for state government affairs for Aetna’s western region. “When we make a proposition, knowing that it carries weight, how do we balance that against the message to be sure to buy?”

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