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CAFP’s Impact on the Proposed “Standardized Health Benefit Plan”

ByErica Pike

Updated May 26, 2021

The CAFP works hard to be a trusted voice at the advocacy table when discussing health policy in our state. Our efforts to improve House Bill 1232 – Standardized Health Benefit Plan Colorado Option have taken place alongside the advocate community and the medical community because our members understand the benefits and challenges that exist when reforming our state’s current health care payment structures.

The staff, lobby team, and CAFP members developed amendment language that the legislature adopted, significantly improving the conditions of the bill that drew the most concerns from our membership. Those top concerns and the changes we have accomplished through multiple stakeholder meetings with the Division of Insurance, Governor’s office, advocates, medical community, and legislators are outlined below:

Introduced Bill Current Language
Mandatory participation of providers Providers will not be required to participate but could be compelled to accept the plan if there are network adequacy issues in their service area.
Penalty for non-participation could result in unprofessional conduct and potential suspension or revocation of license There are no penalties for providers who choose to opt-out of participating in a standardized health benefit plan’s network.
Silent on incentivizing alternative payment models and is based on a fee for service model Advisory board is able to consider whether alternative payment models are appropriate for services covered by the standardized benefit plan
Silent on administrative burden to providers Advisory board can make recommendations on how to streamline prior authorizations
Advisory board did not include a specific seat for physicians Advisory board has a dedicated seat for a physician

Our work is not done, but after careful deliberation and guidance from our lobby team, on April 21st, our Executive Committee voted to move from an amend position to a monitor position. Other organizations such as the Colorado Hospital Association, Colorado Medical Society, and Colorado Rural Health Centers also changed their positions from oppose to monitor or amend  following these changes.

Monitoring this bill means that we are engaged in ongoing conversations with the bill sponsors, advocates, and our membership on the bill’s developments and seek to advise on improving the policy as it progresses through the legislative process. 

While the original bill was proposed as a state public option, as of May 26, 2021, amendments that were adopted struck the “public option” language entirely and is set to do the following (we will update this list as any new changes are made):

  • Beginning in 2023, existing health insurance companies will be required to offer a standardized health benefit plan on the individual and small group insurance markets to address the need for more affordable health insurance options. 
  • The standardized benefit plan would be designed through a stakeholder engagement process but must include first-dollar coverage for primary care and preventive services.
  • An advisory board, that includes a seat for a physician, would consult with the Commissioner of Insurance to implement the standardized benefit plan and monitor its progress.
  • Insurers must annually lower plan premiums over the next three years by a total of 18% by 2025. 
  • If the plan’s provider network is adequate following market-based rate negotiation, there would be no required provider participation. 
  • In the event an adequate network could not be established for a particular service or specialty, a hospital or provider could be compelled to accept the plan at reimbursement rates no lower than 155% or 135% of Medicare respectively. 
  • If the network is inadequate and compelled participation becomes necessary, providers could choose to opt-out without penalty.
  • Individuals who purchase a plan will provide feedback to the state on their experience.
  • A yearly report will be compiled on the impact accepting this plan has had on providers and on where the cost savings came from to ensure transparency.

This new standardized benefit plan is estimated to cover roughly 18,000 uninsured Coloradans. While not an insignificant number, we recognize this bill only addresses a small slice of our population who are in need of health care services and insurance coverage.

To get more involved or discuss the details of the legislation, please contact Erica Pike, Director of Policy and Government Relations at erica@coloradoafp.org