Colorado Governor Signs Bill Requiring Maternity Coverage On All Policies
Governor Bill Ritter signed Colorado House Bill 1021 into law last week, instituting what I consider to be one of the most significant changes to health insurance law in recent years. The law will require all health insurance policies in Colorado to provide coverage for both maternity care and contraception, starting next year. Without this law, people who purchase individual health insurance have very little in the way of options for maternity coverage.
Of course the down side to HB1021 is cost. It remains to be seen what will happen to premiums once all policies cover maternity. Governor Ritter already signed a bill that will require equal pricing on policies for both genders, so the cost of providing maternity care will be spread to both men and women (seems fair enough, since both have a part in making babies). In addition, the cost of providing care will be spread across every policyholder, much the way it works in the group market (all group plans in Colorado cover maternity, which means that everyone with a group policy is paying for maternity care whether they use it or not).
The few individual policies that have offered maternity riders over the years have had to price the riders based on the fact that the only people who are likely to add a maternity rider are people who are planning to use it. Very few people add a maternity rider to an individual police “just in case” – mainly because of the cost of the coverage. But if the cost of providing maternity care is spread across all policy holders, all the time, including those who won’t become pregnant or have already had their children, it makes sense to assume that the price increase for each person will be far lower than the cost of the riders that have been available on a case-by-case basis over the years.
I’m sure that there will be complaints that it isn’t fair to make everyone have a policy with maternity coverage when not everyone will use it. But most people do eventually have children, and HB 1021 will make it possible for people without access to group health insurance to get coverage for maternity care (which, as I mentioned last month, is pretty close to impossible now). I would love to see health insurance carriers expand maternity coverage to include access to midwives and home births, but providing access to maternity coverage for most women who buy their own health insurance is a good start.
It seems now that the only real trick left in the bag is to make all individual coverage guaranteed issue. While this move would play hell with premiums, it would level the playing field between individual and small group coverage. It would stop the current siphoning-off of healthy risks from small group into the individual market. Guaranteed issue would pave the way for merging the individual and small group markets and the advent of exchanges.
BTW… Golden Rule fired the first shot in the commission war with their recent letter to brokers indicating a drop in commissions coming later this year. They blamed it on MLRs. I’d bet it’s broader based than that.