Bill Summary for Bill Number Discussion with DOI about Committee Concerns Raised During June 5 Meeting

Date: 07/15/2015

Final
Discussion with DOI about Committee Concerns Raised During June 5 Meeting

HEALTH CARE EXCHANGE

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01:45 PM -- Discussion with DOI about Committee Concerns Raised During June 5 Meeting

Peg Brown and Scott Lloyd, Division of Insurance, introduced themselves. Ms. Brown discussed whether spreading exchange user fees across all plans is legal. She discussed the mechanisms for funding for the exchange. She referenced the Colorado Regulation 4-2-52 and also discussed a federal regulation on user fees. She then addressed costs for carriers for consumer services and information technology upgrades. Ms. Brown explained how these costs are calculated as part of the required medical loss ration. Ms. Brown then addressed the issue of carriers discontinuing certain health plans. Ms. Brown responded to a prior question about adverse selection from specialty drug coverage. Next, Ms. Brown explained that Colorado did not have an insurable interest requirement that would prevent health care providers from paying the insurance premiums for patients to ensure that they receive payment. She stated that the federal government has issued guidance in this area to discourage the practice in most cases. Ms. Bown addressed a prior question about how the guaranty fund protects consumers in the event of carrier insolvency and how this process works in practice. Ms. Brown next addressed concerned about Colorado HealthOp, and stated that the carrier meets the minimum reserve and financial requirements. Lastly, Ms. Brown discussed the current rate review process and how the Division of Insurance compared rate requests with carrier financial status.

02:02 PM

Senator Aguilar asked if carriers are complying with the specialty drug requirements and Ms. Brown stated that they are complying. Ms. Brown and Mr. Lloyd responded to a question about the maximum amount that can be paid from the guaranty fund on behalf of a consumer. Senator Aguilar asked about reserve requirements and discussion ensued concerning the rate review process and financial assessment of carriers. Senator Lundberg reiterated his concern and question about the legality of the fees funding the exchange. Ms. Brown then cited Section 11 of the PPACA as permitting a fee to fund exchange operations and that federal law requires that it be assessed across a carrier's entire book of business, both inside and outside the exchange. Representative Ryden ask about noncompliant plans that were not renewed under PPACA and the characteristics of those plans. Representative Sias asked about the Division of Insurance's decision not to seek a waiver to allow non-compliant plans to be renewed. Ms. Brown described the Division's decision to do the transition over a one-year, rather than two-year, period. Discussion then ensued about the fees charged by the federal exchange.