October 01, 2009 12:58 AM UTC

Report: House Reform Bill To Greatly Improve Health Care for Coloradans

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• by: Progressive Promoter

(Good info – promoted by Colorado Pols)

From Colorado Consumer Health Initiative and Families USA…

Report: House Reform Bill To Greatly Improve Health Care for Coloradans

Coloradoans Will See Significant Gains in Availability of Reliable, Affordable Coverage

A new Families USA report details health care industry abuses that affect both the quality and availability of health insurance-and the dramatic improvements that Colorado businesses and families can expect with the passage of the U.S. House of Representatives health reform bill.  

The report addresses Colorado’s major health coverage changes:

Gender and Health Status: Insurance companies will no longer be permitted to charge Coloradans higher premiums based on their health status or gender. Under current laws, insurance companies can charge Coloradans whatever they wish to charge for premiums based on gender, health status, and claims experience in the individual market. A 40-year-old-women in Colorado is charged as much as 15% – 37% more for premiums, according to a study by the National Women’s Law Center.

Affordable Premiums: Premiums will be affordable for families, and there will be more and better insurance options.Affordability is a particular concern in Colorado, where health care premiums have risen 4.2 times more quickly than median earnings in the past decade. Under the House bill, Coloradans with moderate incomes will receive sliding-scale subsidies to be used toward the purchase of a high-quality health plan. In addition, all Coloradans will have access to an array of high-quality, comprehensive insurance plans through a new Health Insurance Exchange. No one will be forced into any particular plan, and individuals and business who like their current plans can keep them. The House bill also contains a public plan option.

Aid for Small Business: Colorado small businesses will receive tax credits to help with the cost of providing health care coverage for their employees. Small business coverage is often more expensive than coverage for workers in larger businesses.  In 2008, only 38% of Colorado businesses with fewer than 50 workers offered health insurance to employees, compared to 98% of large businesses (with 50 or more employees).      

Caps on Cost Sharing: Insurance plans will have to place caps on how much Coloradans are required to spend out of their own pockets on cost sharing. In 2009, 241,000 non-elderly Colorado residents with insurance spent more than 25 percent of their pre-tax income on health care in the form of deductibles, co-insurance and other cost-sharing. High out-of-pocket medical costs are what drive many American families into debt and even bankruptcy. Starting in 2013, there will be an annual cap of $5,000 for individuals and $10,000 for families and a sliding scale will give lower-income people even greater protection from out-of-pocket costs.

Low-Income Coverage: There will be expanded coverage for low-income people. Low-income Colorado residents often can’t get insurance that state’s federal coverage program doesn’t cover any adults under age 65 unless they are parents or have a disability. (Working parents can get coverage if their incomes are less than 60 percent of Federal Poverty Level or $18,310 for a family of three in 2009.). The legislation will expand Medicaid to cover all low-income, uninsured residents, including adults without dependent children and those who do not have a disability. (HB09-1293 will eventually expand eligibility to this population, but the details are not clear yet on the benefit package).

Maintaining And Renewing Coverage: Individuals will be able to maintain affordable coverage and to renew such coverage when they get sick. In a practice known as “rescission,” insurance companies revoke policies when policyholders become sick and begins filing claims. Insurers typically accuse individuals of intentionally withholding information about a medical condition on their applications, while those accused may have been unaware of the condition or considered it too minor to mention.  Reform legislation calls for an opportunity for an external reviewer to examine any such situation, and the insurer will be required to continue paying medical bills during the review period. Insurers will be able to rescind policies in Colorado only in clear cases of fraud.

COBRA: Unemployed workers will have new options for quality coverage as alternatives to COBRA. Rising unemployment has driven up the number of uninsured working-age individuals in Colorado, in part because the state’s average unemployment benefit of $1,484 is not sufficient for families to afford to continue their health insurance and meet other essential expenses.  The average monthly family COBRA premium is $1,051, almost 71% of the monthly unemployment benefit. The stimulus bill passed earlier this year provides some assistance but runs out in 2010. COBRA coverage will remain an option under reform, but sliding-scale subsidies for unemployed workers will allow them to purchase coverage through the new Health Insurance Exchange that is comparable to what is provide by large employers.

The Uninsured: The House bill will aid uninsured Colorado residents in gaining health coverage.  Roughly 790,000 Colorado residents were uninsured in 2008.  The House bill will provide coverage for an additional 651,000 Coloradans who are currently uninsured.  

Medicare Improvements: The ‘doughnut hole” will disappear and other personal expenses in Medicare will be covered. Colorado Medicare enrollees must pay up to $3,454 a year out of their own pockets-on top of their Part D premiums-because of the prescription drug benefit gap called the “doughnut hole.” This gap will be gradually eliminated, and an immediate 50 percent discount on brand-name drugs in the doughnut hole will make prescriptions more affordable right away. Many preventive services covered in Medicare come with out-of-pocket copayments, co-insurance and deductibles that discourage Colorado’s approximately 433,000 Medicare beneficiaries from using them. These will be eliminated.

Pre-existing conditions: Insurance companies will no longer be able to discriminate against Coloradans based on a pre-existing condition. Currently, if you try to buy a policy in the individual market  in Colorado, health insurers can refuse to sell you a plan because of any pre-existing condition.  The exception is CoverColorado, the high-risk pool, which is the insurer of last resort – but premiums are as much as 140% higher than market rate.

Spending caps: Insurance companies will be forbidden to place annual or lifetime spending caps on insurance policies. Currently in Colorado, a health insurance policy, including CoverColorado, the high risk pool, may stop paying claims if an annual or lifetime cap on coverage is exceeded. As a result of repeated, extended or expensive medical care, policy owners could “run out” of coverage and face mounting medical bills on their own.

A copy of the Families report for Colorado is available on the Web at www.familiesusa.org and at www.cohealthinitiative.org.