Apr 20, 2017

Bethany Pray currently serves as CCLP's Deputy Director. Her areas of expertise include regulatory analysis and advocacy for Medicaid and commercial coverage, access to behavioral health benefits, Medicaid eligibility and much more.Staff page ›

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The other shoe drops: the Market Stabilization rule

by | Apr 20, 2017

Despite over 4,000 posted comments, many of which raised significant concerns, the U.S. Department of Health and Human Services finalized the Market Stabilization rule described in our blog last month. The rule, issued seemingly in response to carriers’ complaints about profitability of individual and small-group plans offered on the exchanges, includes a range of measures that may dampen enrollment and leave many consumers both puzzled and poorer.

While the rule will have a major impact on all states, it offers flexibility that Colorado could use to its residents’ advantage. The question will be how our state exchange and Division of Insurance respond to opportunities to tailor the rule to our state specifics.

The main areas of concern are outlined here, along with opportunities for flexibility (in italics):

Under the rule, open enrollment will run only from Nov. 1 to Dec. 15 for the 2018 plan year, requiring Colorado’s sludgy eligibility systems to do 12 weeks of work in six weeks’ time. No additional funds have been provided to states to get out the word about the abbreviated enrollment period, or to beef up IT systems to process enrollment more quickly. As a result, we anticipate lower insurance enrollment. Those who sign up may tend to be sicker, since young healthy Coloradans typically procrastinate, signing up in higher numbers in January. Finding a way to bring those healthier people into the risk pool would translate into lower costs for everyone.

Colorado could lessen the effects of the short open enrollment period by taking advantage of the opportunity to supplement it with a Special Enrollment Period (SEP). This would allow our exchange, Connect for Health Colorado, to bring in those people who were held up by technological glitches or inadequate information. We strongly support their doing so.

The actuarial value (AV) of plans will slide, with carriers permitted to issue plans at each metal level that cover 2 percent less of consumers’ costs. When the carrier covers less, costs shift to the consumer. The change could lower premium costs but those who already struggle with high deductibles may face even higher ones, and copays and coinsurance are apt to rise as well.

The second-lowest premium for a silver-plan in a region is the basis for the amount of premium tax credits an enrollee can receive.  When plans are designed to cover less of a consumer’s cost and premiums dip, the amount of premium assistance goes down as well. That means that Coloradans between 133 and 400 percent of the federal poverty level will get less help than they did in 2017.

Because deductibles and cost-sharing will be higher on those lower-AV plans, having access to cost-sharing (CSR) assistance will be especially important. CSR can significantly lower deductibles, copays and coinsurance, but not for Coloradans who make over 250 percent of the federal poverty level.

Colorado could opt against the actuarial slide, ensuring that bronze, silver, and gold plans have the same value in 2018 that they’ve had in prior years. If the Division of Insurance maintains those standards, we would support the state exploring ways to allow carriers to offer plans of different AV levels, without the metal level labels.  

Coloradans who enroll through a special enrollment period (SEP) because of marriage, birth, adoption, a loss of coverage, or a move, for example, could have to show proof of eligibility for a SEP. While it’s understandable that carriers would want to make sure that SEPs were justified, and that enrollees were not just signing up after getting sick, the new requirements may deter healthier people from going through the hassle of signing up. Studies have shown that few who are entitled actually take advantage of SEPs, and these measures would leave more people uninsured.

The federal rule gives Colorado the option to postpone these changes and move forward on a plan to assess eligibility for SEPs by auditing enrollees who apply for them. At the very least, Connect and the Colorado Division of Insurance would be wise to limit the burden on consumers by only asking for documentation of certain SEPs, like a move or loss of coverage, and pinging available databases instead of demanding documentation.

Some SEPs will also be harder to qualify for, and Colorado must comply with those changes.  For example, couples seeking a SEP for marriage will have to show that one of the two already had coverage.

A last area of concern involves potential erosion of guaranteed availability, the requirement that carriers offer plans to all who apply, regardless of age or health status. The final rule would allow carriers to apply a premium payment to an individual’s past debt, instead of applying payment to the new year and effectuating coverage.

We believe state law would prevent carriers from instituting that practice.  In addition, requirements in the rule that consumers get notice in enrollment application materials would seem to bar carriers from taking this step until farther down the road.

Colorado is in excellent shape regarding network adequacy. The federal rule allows states with demonstrated capacity to regulate plans’ provider networks, and the Division of Insurance did comprehensive work with stakeholders during 2017 to create clear network standards. The DOI has the tools to determine whether plans have enough providers to meet consumers’ needs, and it would make little sense to defer to weak federal standards.

At the end of it all, we have serious doubts that the rules will help with market stability, as the administration alleges. A recent Standard & Poor’s analysis suggests that more carrier experience in this nascent, post-ACA market – rather than playing loose with the rules – is what will lead over time to more predictable behavior and predictable profits.  In the meantime, the federal rule threatens that stability by erecting obstacles to enrollment, and in particular to enrollment of younger and healthier residents. Connect for Health and our Division of Insurance should use the flexibility allowed by the rule to keep more Coloradans covered and to ensure that high out-of-pocket costs don’t result in worse access to care.

By Bethany Pray

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To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.


Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.


Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.


Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.