Last December, HHS made it clear that they were giving states a lot of flexibility in determining what plan would serve as the benchmark for the state’s “essential benefits” for individual and small group health insurance policies that would be sold starting in 2014.
After months of consideration, Colorado has selected Kaiser Permanente’s small group plan as a benchmark. This is the largest small group plan in the state, with almost fourteen thousand members, and was selected by a group of officials from the Colorado Division of Insurance, the Governor’s office, and the health benefits exchange. The Division of Insurance will be taking comments until next Monday before making a final announcement, and you can contact them by email ([email protected]) if you’d like your comments to be considered.
The Kaiser plan covers services in the ten areas that are required by the PPACA (ambulatory patient services, emergency care, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription medications, rehabilitative services, lab work, preventive care/disease management, and pediatric care), which means that it will serve as a benchmark for services in those areas without the DOI having to add additional coverage minimums. In addition, the Kaiser plan was generally considered to be a good balance between comprehensive coverage and affordable coverage. It’s not the most comprehensive policy out there (the much maligned “Cadillac plans” offer more benefits), but it provides a good level of coverage and – unlike the Cadillac plans – it’s affordable.
So as of 2014, all individual and small group plans sold in Colorado will have to offer benefits that are roughly equivalent to – or better than – the benefits provided by the Kaiser Permanente plan. HHS gives states and insurance carriers some flexibility in terms of the exact details of the benefits and the ability to modify plans as time goes on. But overall, individual and small group plans will provide at least the level of benefits offered in Kaiser plan.
The individual Colorado health insurance carriers we work with (including Kaiser Permanente) are the ones we’ve deemed reputable and stable, so many of the plans they offer are already good enough that they will require very few significant changes in order to be compliant as of 2014. The essential benefits rules and the Kaiser benchmark will probably have more of an impact in the limited-benefit market and on plans that have traditionally been sold by having the insureds select which benefits they want to include (MEGA, Alliance, United American) rather than just providing basic across-the-board coverage.
Now that insurers know which plan has been selected, they can begin working to make whatever changes and enhancements will be necessary to have their policies be compliant by January 2014. These basic standards won’t change much about the better plans that are currently available, but they’ll help to bring some of the not-so-great plans up to par or remove them from the market. Either way, it should be beneficial for consumers.