By Matthew Valeta, Health Policy Fellow
Being able to purchase individual insurance used to mean you were part of a club. Unfortunately, it has been a very exclusive club. In the individual insurance market insurers have been able pick and choose only from the healthiest consumers who are likely to use health care the least. If you have a pre-existing condition getting coverage can be nearly impossible. And if you can even get insurance it can be too expensive.
But after 2014, thanks to Obamacare, insurers are no longer the referees preventing access to health insurance for those not in the club. Insurers will no longer be able to deny coverage to Americans based on pre-existing conditions, rate people based on gender, cap families’ annual lifetime coverage dollar limits and much more.
And the insurance individuals can get will be better. Colorado is creating a health benefit exchange (COHBE), which is basically a new online health insurance marketplace where individuals and small businesses can shop for and compare health insurance plans. Individuals, families and small businesses will be able to use COHBE’s website or get help from navigators in their communities to determine if they qualify for subsidies or tax credits to help purchase health insurance.
But, if insurance companies want to sell their plans to the tens of thousands of new consumers in Colorado’s Exchange, their plans must meet certain requirements – known as certification standards. Once they do they become qualified health plans or QHPs and will be allowed to sell insurance in the Exchange. QHPs standards were designed to ensure consumers could choose from comprehensive and quality health plan that works for them!
Before a plan can be part of the Exchange, COHBE must determine that a QHP really serves the interest of those buying it – the qualified individuals and small employers. While COHBE cannot negotiate prices with plans per Colorado law (some states can do this), COHBE can prevent insurers from offering plans that would take advantage of consumers. So COHBE can be our referee over the health plans consumers will buy in the exchange.
There are several certifications requirements QHPs must meet to be considered for the Exchange at all.
- First, in order to be a QHP an insurance plan must provide Colorado’s essential health benefits (EHBs). This establishes a basic health plan in Colorado that ensures no one is without coverage for the most essential health needs.
- Second, health insurers are required to offer you several choices for the cost of your health plan. This is determined through actuarial value (AV)– the percentage of total average costs for covered benefits that a plan will cover. If your plan has an actuarial value of 70% then on average you would be responsible for 30% of your health costs after your premiums. Plans with higher actuarial value will have higher premiums. All insurers are required to at least offer silver plans (70% AV) and gold plans (80% AV).
- Third, insurers are not allowed to market QHPs in ways that will discriminate against people with illnesses. This protects the exchange by preventing insurers from passing on sicker patients with higher costs to other insurers and higher premiums for their consumers.
- Fourth, the costs of QHPs in the exchange are set for an entire year. This prevents insurers from frequently increasing the costs of plans for consumers. Plus, all rate increases are required to be taken through the Division of Insurance’s rate review process to ensure that the rate increase is justified.
- Fifth, QHPs are required to provide transparency in the cost of their plan, payment policies, providers in their network, the cost sharing information, and data on enrollment, claims denials and rating practices for consumers. Access to this information will allow consumers to know exactly what they are purchasing.
- Sixth, QHPs must include a sufficient number of essential community providers. Essential community providers are providers that serve predominantly low-income, medically underserved individuals. This ensures that communities that have a high need access to coverage will be able to.
Thanks to Obamacare, insurers will now have to sell qualified health insurance in states exchanges. With these new rules protecting consumers, we will have access to more comprehensive coverage at an affordable price. And that is a club we all deserve to be in.