State to insure uninsured with value benefit plans?

The state of Colorado – through the efforts of a bipartisan group of legislators – is continuing to try to provide affordable health-care coverage to its uninsured citizens through limited health plans called “value benefit plans.”

Senate Bill 217, co-sponsored by 16 Democrats and four Republicans including Sen. Steve Johnson of Fort Collins, aims to create “an affordable, baseline health insurance product representing the minimum benefits package for the state’s individual market.”

The bill, signed into law by Gov. Bill Ritter on June 3, called first for the creation of a panel of experts to help fashion the VBPs with input from health insurance companies operating in the state. That 19-member panel, called the Centennial Care Choices Panel, was appointed by the governor in June and includes members with expertise in actuarial science, health benefit plans design and disability issues along with health-care providers and consumers.

Joan Henneberry, Colorado’s executive director of Health Care Policy and Finance, and Marcy Morrison, Colorado’s insurance commissioner, were appointed to serve as panel co-chairs.

Morrison said one of the first things the panel wants to do is to find out what’s currently available from the private health insurance market when it comes to affordable plans, noting that most companies offer an array of health coverage offerings.

“Before we start creating a plan, we should hear from the industry what’s out there now,” she said.

The Centennial Care Choices Panel picks up to some degree where the Blue Ribbon Commission for Health Care Reform – sometimes referred to as the “208 Commission” in reference to the Senate bill that created it – left off. The commission spent more than a year studying a variety of health-care proposals and offered their recommendations for change to the Colorado Legislature last January. But state financial constraints resulted in little action and left most of the state’s estimated 800,000 uninsured without coverage.

Morrison said the Centennial panel’s mission will be much more focused, a good thing given the short timeline it has to complete its work. Created in June, the panel has until March 1, 2009, to issue its final report to the legislature for possible action.

“(The 208 Commission was) obviously looking at the uninsured but at a height of maybe 20,000 feet,” she said. “We can piggyback on some of their analysis, but this is going to be quite different.”

Morrison said SB 217’s prime sponsor, Denver Democrat Bob Hagedorn, has been explicit about including the insurance industry in the panel’s deliberations to see if the VBPs will fly.

“The insurance industry now has many plans,” she said. “The question is can they come up with something that is attractive to the population we’re interested in and can people accept the fact that for X number of dollars this is the kind of plan you can receive and the kind of benefits they’ll receive?”

SB 217 calls for VBPs “with a benchmark standard of approximately 80 percent of the actuarial value of the preferred provider organization plan offered to employees of the state of Colorado.”

The bill also calls for the state to help subsidize the cost of the plans for the poorest of Colorado’s residents to help them afford the plans – if the state has any money to do so.

Vanessa Hanneman, associate director of the Colorado Association of Health Plans, said representatives of some of her members – which include such carriers as Aetna, Anthem, Assurant, Cigna, Colorado Access, Denver Health, Great-West Healthcare, Kaiser Permanente, Rocky Mountain Health Plans and UnitedHealthcare – have been sitting in the panel’s meetings to monitor the discussions and answer questions.

Hanneman said it’s still too early to say what kinds of VBPs, if any, can be achieved as a result of the panel’s deliberations.

“It’s definitely an opportunity to be creative,” she said. “I think it’s an opportunity to do some what-if scenarios and to dream. Whether or not it can cover all the uninsured is difficult with Colorado’s present financial situation.”

Hanneman said she didn’t know if the ultimate VBPs will offer only bare-bones coverage or something richer in benefits if state subsidies are available. “I think the question right now is: Is something better than nothing? But I don’t know if everyone can agree on that.”

A few other states have created or are in the process of creating their own versions of VPBs, but Morrison says in her view that’s not the ideal way to deal with the uninsured because of the inequities it can create between states.

But until a national solution to the health-care coverage crisis can be achieved, it may be the only way to attack the problem, she notes.

“If states don’t push to get something happening, I’m not sure we’ll get anything accomplished,” she said. “I feel very strongly that we must find some solution, even if it’s just a transition solution.”

Steve Porter covers health care for the Northern Colorado Business Report. He can be reached at 970-221-5400, ext. 225, or sporter@ncbr.com.

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