J_HCE_2017A 12/15/2017 09:05:23 AM Committee Summary

09:06 AM -- Call to Order



Senator Lundberg called the meeting to order. He reviewed the committee's charge and the meeting agenda (Attachment A).



171215 AttachA.pdf





09:07 AM -- Update on Open Enrollment



Kevin Patterson, Chief Executive Officer, Connect for Health Colorado (exchange), distributed a handout to the committee (Attachment B) and discussed the current open enrollment period. He discussed the current number of consumers who have already enrolled in 2018 health plans and the January 12, 2018, deadline for enrollment. He discussed the uninsured rate in Colorado, which is currently at 6.5 percent uninsured. Mr. Patterson spoke about the exchange's strategic plan and the collaborative process that was involved in developing that plan. He pointed out the four goals of the strategic plan: advocate to improve access to coverage in rural areas; maximize the number of consumers and employers who shop and enroll through the health insurance marketplace and apply for available financial assistance; improve the ability of customers to attain and retain the right coverage for their needs; and ensure that the exchange is a healthy and thriving organization.



171215 AttachB.pdf



09:17 AM



Mr. Patterson pointed out that the exchange reduced its operating expenses from approximately $60 million in previous years to under $40 million for 2018. He told the committee that only one insurance carrier is offering plans through the Small Business Health Options Program (SHOP) this year. He stated that small businesses are not likely to purchase coverage through the exchange. He discussed the outreach efforts the exchange has taken to help consumers understand how insurance works, the differences in coverage between plans, and the financial assistance available through the exchange. He also said that many consumers underestimate the threshold for receiving financial assistance and do not realize that they may qualify.



09:25 AM



Mr. Patterson discussed the possibility of families currently enrolled in the Child Health Plan Plus (CHP+) program needing to find other coverage if the program is not funded in 2018 by Congress.



09:30 AM



Mr. Patterson responded to questions from the committee about the number of consumers who sign up for coverage but who do not pay the premiums, technical problems with the exchange website, and areas of the state with higher than expected enrollment rates.



09:45 AM



Committee discussion and questions continued. Mr. Patterson dialogued with the committee about CHP+ and the role of health districts in coordinating enrollment in health insurance plans through the exchange. Committee members further discussed CHP+ and alternatives to funding this program.



10:01 AM



Committee members discussed reimbursements for brokers who help consumers enroll in health plans through the exchange and the findings of the Division of Insurance's (DOI) Colorado High-Risk Health Coverage Study.













10:09 AM



Committee members discussed the fees paid by insurance carriers to the exchange and the possible elimination of the individual mandate through the federal tax bill. Mr. Patterson responded to questions about how the elimination of the individual mandate would affect the exchange by explaining that he expects that individuals and families purchasing insurance through the exchange will continue to do so because of the financial incentives they receive.



10:18 AM



Brian Braun, Deputy-Director and Chief Financial Officer, Connect for Health Colorado, told the committee that the exchange has built flexibility into its contracts to allow for adjustments if enrollment drops. The committee discussed the health literacy tools on the exchange website.



10:23 AM -- Committee Discussion with DOI Regarding 2018 Insurance Rates



Peg Brown, Chief Deputy Director, DOI, and Michael Muldoon, Actuary, DOI, came to the table and distributed a handout to the committee (Attachment C). Ms. Brown referred to the handout during her testimony. She discussed the primary components of insurance premiums. She explained that health care service costs are the primary component of health insurance premiums and that utilization rates and unit costs contribute to this cost. She stated that there are substantial differences in health care service costs between geographic areas within the state, which also impacts premiums.



171215 AttachC.pdf



10:29 AM



Mr. Muldoon discussed the actuarial standards associated with setting premium rates. He explained that the DOI reviews the financial condition of each company and evaluates the potential risk that company poses to the exchange and Colorado residents should it become insolvent during a plan year. Insurance carriers are required to provide a variety of data and justification of actuarial assumptions to support proposed rate increases, including:



• summary of claims, premiums and membership for the 2016 base experience period;

• historical monthly medical and pharmacy claims experience for 4 years;

• utilization and unit cost claim trend development, and adjustments for future provider reimbursement levels;

• risk adjustment program estimates of payments or receivables and their impact to premiums;

• changes in population risk and morbidity levels from 2016 to 2018;

• changes in benefit levels and actuarial values for each benefit plan;

• changes in administrative expenses and profit margins loaded into premium rates; and

• actuarial estimates of incurred but not reported (IBNR) claim reserves built into claim estimates.





10:33 AM



Ms. Brown told the committee that the uncertainty about whether the individual mandate would be eliminated and whether Cost Sharing Reductions (CSRs) would be funded complicated the premium rate setting process. She explained that the division required carriers to file two sets of rates this year: one assuming CSRs would be paid in 2018; and another set assuming the CSRs would not be paid. She pointed out that this preplanning made it easier for the division and the exchange to switch to the non-CSR filings when the federal government announced it would not continue paying the CSRs. Committee discussion followed about the carriers in the individual market who do not offer plans on the exchange.



10:50 AM



Committee discussion followed about the types of plans offered on the exchange, the absence of platinum plans on the exchange, the review process available to consumers when a carrier denies coverage, the reduction in CSR funding, plan formularies, and premium tax credits.



11:00 AM



Ms. Brown discussed the DOI study that looked at the following: establishing a high cost reinsurance program which subsidizes payments by carriers for high cost conditions and claims; encouraging competition between and work by providers to reduce health care service costs; and working with existing and new carriers for expanded service areas to increase carrier competition in geographic areas with limited choices.



11:10 AM



Representative Kennedy told the committee about his collaboration with Senator Lambert to address issues around reinsurance. He pointed out that a reinsurance program is a cost shifting solution, and not a solution to the underlying cost of care. Further discussion of cost of care and the role of physicians and patients in discussing the cost of care followed.



11:15 AM



Senator Lundberg made closing comments focused on the cost of health care services and the need for consumers to ask providers about the cost of services.



11:18 AM



Senator Lundberg adjourned the meeting.