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Posted: September 16, 2013

The new health care exchanges:

Train wreck or much ado about nothing?

Patricia Dean

With only three weeks remaining before the health exchanges open for business, the biggest challenge to President Obama's signature health care legislation is an open question. As politicians in Washington D. C. debate refusing to raise the debt limit unless "Obamacare" is defunded, some are predicting a train wreck, while others say all the dire predictions are much ado about nothing.

While there will no doubt be glitches and failures, the truth seems to depend on where you live. And, once again, it is an advantage to live in Colorado.

Colorado’s Health Care Marketplace – Connect for Health Colorado

Colorado is one of only 16 states and the District of Columbia that set up its own new health insurance marketplace, called Connect for Colorado Health. Starting Oct. 1, it will be responsible for signing up Colorado and seeking to purchase coverage in the individual and small-group markets.

Currently, there are approximately 2.25 million Coloradoans with health insurance. That number is expected to increase by roughly 500,000 under the ACA, with the majority of those likely purchasing policies through Colorado's Exchange. In addition, Connect for Colorado Health will be responsible for determining whether those who contact the Exchange are eligible for Medicaid under the ACA's Medicaid expansion and whether consumers are eligible for subsidies to reduce the cost of their health insurance. This "one stop shopping" will be the first time state agencies have integrated private and government-sponsored insurance under one roof.

Last month, the Colorado Division of Insurance approved 541 separate plans offered by 18 different insurers on a statewide basis. Prices vary by the county in which the consumer lives and the level of coverage chosen. (In 2015, insurers will also be permitted to charge different rates for smokers.)

The levels of coverage are broken down into four categories: Platinum, which covers 90 percent of medical costs; Gold, which covers 80 percent; Silver, which covers 70 percent; and Bronze, which covers 60 percent. The individual market has one additional tier, a "catastrophic plan" which provides bare-bones coverage for those under age 30 (or older than 30 if the individual meets specific financial eligibility requirements).

Within each level of coverage, consumers can shop between competing insurers, although all plans are required to cover a set of minimum services, called “essential health benefits.”  Figure 1 provides a sampling of monthly plan premiums for individuals around the state. The state Exchanges will also sell policies to small groups, which are defined as having less than 50 employees.  A sampling of the small-group policies by select counties appears in Figure 2.

The successful implementation of Colorado’s exchange is due in large part to the State’s early and unified approach.  Colorado set up its Exchange with the passage of a bipartisan bill in 2011. Republicans agreed to back the bill if it included a legislative oversight committee that could block future exchange funding. While many legislators were skeptical and there has been much debate over the last two years, the oversight committee has not denied any funding requests. Indeed, at its final meeting before the exchanges go online October 1, members of both parties praised the Exchange’s leadership for creating a dynamic marketplace for health insurance. The Colorado Exchange opened its call center a little over a week ago, although it will not be able to help consumers purchase insurance until Oct. 1.

By its official opening date, there will be 187 customer service agents available to guide customers through the process of purchasing insurance. These so-called "navigators" will be able to enroll eligible Coloradoans in Medicaid and to calculate subsidies for those eligible. There will be a group of navigators dedicated to Spanish-speakers and the Exchange has outside access to experts who can assist customers in 173 different languages.

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Patricia Dean is an attorney with Holland & Hart specializing in healthcare transactions, regulatory matters, practice formation, government investigations, medical ethics and physician integration. She can be reached at (303) 295-8464 or PDean@Hollandhart.com

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Readers Respond

Paul, thank you for this article and the included Figures. Out of curiosity, is there a reason why health insurance is more expensive in Pueblo County than in Arapahoe County? By Nathan Jansch on 2013 09 16
Well done!!!! Probably the most objective view I have read on the subject. By Bob Vidal on 2013 09 16
Thanks for the great info, I have a question that I can't find an answer for. If an individual already has insurance, but it's very limiting and has a super-hi deductible (in other words, they are underinsured) can he or she switch to a Colorado option? By Vicki on 2013 09 16
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