Senate Bill 11-200: The Colorado Health Benefit Exchange

Posted on: March 1st, 2011 by admin 1 Comment

IB-2011-A (March 2011)
Author: Linda Gorman

PDF of full Issue Paper
Scribd version of full Issue Paper

Bill Context:

The federal Patient Protection and Affordable Care Act of 2010 (ObamaCare) encourages each state to set up an American Health Benefits Exchange. States received $1 million federal grants to work on exchange development. The exchanges will broker individual and small group plans offered by insurers and health benefit plans. They do not buy or develop health insurance and must be self-supporting by January 1, 2015.

The law says that exchanges may become self-supporting by charging “assessments or user fees to participating health insurance issuers, or to otherwise generate funding, to support its operations.” The model, and the only operating exchange of any significant size, is the Massachusetts Connector Authority, which cost $30 million to operate in 2009.

By January 1, 2013, the Secretary of Health and Human Services must determine whether a state will have an operational exchange by January 1, 2014. If a state exchange will not be operational, the federal government will operate its own exchange in that state either directly or through agreement with a not-forprofit entity. Federal law specifically says that the operation of a federal exchange has no effect on state regulatory authority or law.

A state’s ability to tailor exchange products to its needs is limited. State exchanges must comply with detailed federal regulations. Only qualified health plans, as defined by the new law, may be offered, and exchanges must meet specific reporting, structural, and contracting requirements, produce required ratings, and provide internet and telephone access. The Secretary of Health and Human Services has yet to issue either regulations giving specific standards for state exchanges or a model to provide guidance.

Several governors have determined that their citizens will be better off without a
state exchange.

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One Response

  1. Cathy Mitchell says:

    Is dissent allowed by people who consider themselves staunch conservatives on this issue, or if I support Rep. Amy Stephens am I automatically labeled a RINO or Democratic plant? That seems to be the case so far. I’m rather leery of any group that is not open-minded or shuts down dissenting opinions.

    There are some good points in opposition to this bill, but in my mind, more compelling reasons to support it. Primarily, it is not enough just to oppose Obamacare (I disagree that this bill is just Obamacare for Colorado, or a “solution in search of a problem). There is a real health care cost problem in this country. It has been recognized for decades and is the reason HMOs, PPOs, PPS – DRGs etc have been tried. I believe that exchanges are something that should be tried in order to increase competition and market access The Heritage Foundation supports them, for that reason.

    The Heritage Foundation, while opposing Obamacare type exchanges, supports them if done properly. Rather than just opposing this bill, wouldn’t it would be more useful to support Rep. Stephens in her efforts, and suggest modifications? According to Sen. Boyd, the Democrats have already given up much of what they wanted in the bill. While it would be nice if the Republicans had autocratic control and could govern exactly as they want, that’s not how it works.

    To be transparent, I have never met or have any affiliation with Rep Stephens, other than talking with her Aides at the Capitol and receiving a folder of information they have compiled to try and better communicate the purpose of the bill. They acknowledged that, while working with the business community and Democrats on this bill, they may have not communicated well with the various freedom groups and want to fix that.

    I may be seen as a liberal sympathizer because I like to talk to Democrats in an effort to improve understanding. Sen. Boyd gave me a few minutes of her time (as well as Sen. Mitchell) to discuss this bill. Having seen her in action over the years (and recently being involved with a group on another issue who is singing her praises for helping them oppose DORA), I think she has integrity. While I suspect she and I have the same goals – what is best for all people – we believe in polar opposite methods for achieving that goal. She sees redistribution of wealth and government as the solution, I see limited government, capitalism and individual responsibility as the solution. While I believe in limited government, no government (anarchy) is not the answer, so the best course is somewhere in between. I see the proper role of our two party system as the struggle, similar to a tug of war, between those two opposites. Compromise with Democrats is currently anathema to liberty groups, and for good reason, as the compromises of the past have led to our current problems. But that just means we need better compromises, not no compromise.

    Opposition to this bill has pointed out that exchanges did not work well in Massachusetts or the first time in Utah, but states are the place to experiment. Let’s use their trials as a learning experience. Other opposition states that, rather than exchanges, we need different reform measures such as tort reform, permission to sell insurance across state lines, etc. I agree that other reform measures are needed in fact, lots of small reform measures need to be tried. One of the many reasons Obamacare is bad is the size and scope of the bill. One modification I would suggest to SB 200 is to review it in three years time versus five.

    This comment is written rather hastily – there never seems to be enough time to do everything one wants to do, let alone as well as it needs to be done. If something I said was offensive, I apologize, it was not intentional, just coming from an imperfect person. What I would like is for my comments to spur further debate. There is so much more that needs to be said on this subject. As Joan Rivers would say, “Can we talk?”

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