The act requires the commissioner of insurance (commissioner) in the department of regulatory agencies to establish a standardized health benefit plan by rule on or before January 1, 2022, to be offered by health insurance carriers (carriers) in the individual and small group markets. The standardized plan must:
- Offer health-care coverage at the bronze, silver, and gold levels of coverage;
- Include pediatric and other essential health benefits;
- Be offered through the Colorado health benefit exchange and in the individual market;
- Have a standardized benefit design that is created through a stakeholder engagement process, has a defined benefit design and cost sharing that improves access and affordability, and is designed to improve racial health equity and decrease racial health disparities;
- Provide by, among other measures, providing first-dollar, predictable coverage for certain high value services;
- Be actuarially sound and allow carriers to meet financial requirements;
- Comply with state and federal law; and
- Have a provider network (network) that is culturally responsive and reflects the diversity of its enrollees and be no more narrow than the most restrictive nonstandardized plan offered by the carrier.
Each carrier must:
- Include, as part of its network access plan for the standardized plan, a description of its efforts to construct diverse, culturally responsive networks;
- Include a majority of the essential community providers in the service area in its network; and
- Allow consumers to easily compare the standardized health benefit plans offered by each carrier.
Additionally, the act requires the commissioner to:
- Promulgate rules regarding network adequacy;
- Contract with an independent third party to conduct an analysis of the implementation of the standardized health benefit plan and the related requirements; and
- Collaborate with the health benefit exchange to conduct a consumer survey.
Beginning January 1, 2023, and each year thereafter, the act requires carriers that offer:
- An individual health benefit plan in Colorado to offer the standardized health benefit plan in the individual market in each county where the carrier offers an individual plan; and
- A small group health benefit plan in Colorado to offer the standardized health benefit plan in the small group market in each county where the carrier offers a small group plan.
In the individual market and in the small group market, each carrier shall offer a standardized health benefit plan premium that:
- For 2023, is at least 5% less than the premium rate for health benefit plans offered by that carrier in the 2021 calendar year, as adjusted for medical inflation;
- For 2024, is at least 10% less than the premium rate for health benefit plans offered by that carrier in the 2021 calendar year, as adjusted for medical inflation;
- For 2025, is at least 15% less than the premium rate for health benefit plans offered by that carrier in the 2021 calendar year, as adjusted for medical inflation;
- For 2026 and each year thereafter, is increased above the premium in the previous year by no more than medical inflation, relative to the previous year.
The act also requires each carrier to file its premium rates for the standardized health benefit plan with the commissioner. If a carrier or health-care provider anticipates that a carrier will be unable to meet network adequacy standards or the premium rate requirements due to a reimbursement rate dispute, the carrier or the health-care provider may initiate nonbinding arbitration prior to filing rates for the standardized health benefit plan. If a carrier cannot meet the premium rate requirements, the carrier must notify the commissioner of the reasons. The division shall hold a public hearing concerning network adequacy and premium rates. Based on evidence at the hearing, the commissioner may establish carrier reimbursement rates for hospitals and health-care providers and require the hospitals and health-care providers to accept patients and the established reimbursement rates. The act establishes limits on the reimbursement rates that may be set.
The act creates an advisory board, with members appointed by the governor, to implement the standardized health benefit plan. The advisory board is charged with considering recommendations to streamline prior authorization and utilization management processes, recommend ways to keep health-care services in communities where patients live, and to consider alternative payment models.
The commissioner may apply to the secretary of the United States department of health and human services for a state innovation waiver to capture savings as a result of the implementation of the standardized health benefit plan. Upon approval of the waiver, the commissioner is authorized to use any federal money for the implementation of the bill and for the Colorado health insurance affordability enterprise.
The act requires the commissioner to:
- Contract with an independent third party to prepare reports regarding the implementation of the bill;
- Monitor whether there is an adequate number of health-care providers in the carriers' standardized health benefit plan network and the percentage of premiums attributable to health-care providers in the network;
- Contract with an independent third-party organization to evaluate how to phase in a hospital's reimbursement rate methodology;
- Report various findings during the hearings conducted pursuant to the "State Measurement for Accountable, Responsive, and Transparent (SMART) Government Act"; and
- Disapprove of a rate filing submitted by a carrier if the rate filing reflects a cost shift between the standardized health benefit plan and the health benefit plan for which rate approval is being sought.
The department of public health and environment, upon notice from the commissioner, may fine or suspend or impose conditions on a hospital that refuses to participate in the standardized health benefit plan.
The act creates the office of the insurance ombudsman in the department of health care policy and financing to act as an advocate for consumer interests in matters related to access to and affordability of the standardized health benefit plan.
To implement this act:
- $1,409,637 is appropriated to the department of regulatory agencies for use by the division of insurance and the executive director's office, $212,680 of which is reappropriated to the department of law for the provision of legal services; and
- $78,993 is appropriated to the department of health care policy and financing.
(Note: This summary applies to this bill as enacted.)