{"id":47916,"date":"2023-01-28T13:04:36","date_gmt":"2023-01-28T13:04:36","guid":{"rendered":"http:\/\/www.brandon.ddtest.info\/multisite-test\/which-colorado-laws-are-actually-lowering-health-care-costs\/"},"modified":"2023-01-28T13:04:36","modified_gmt":"2023-01-28T13:04:36","slug":"which-colorado-laws-are-actually-lowering-health-care-costs","status":"publish","type":"post","link":"http:\/\/www.brandon.ddtest.info\/multisite-test\/which-colorado-laws-are-actually-lowering-health-care-costs\/","title":{"rendered":"Which Colorado laws are actually lowering health care costs?"},"content":{"rendered":"

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If there\u2019s an idea that might reduce health care costs, there\u2019s a good chance Colorado\u2019s trying it out.<\/p>\n

The state\u2019s Office of Saving People Money on Health Care laid out a plan in 2020<\/a> that included passing a partial public option; extending the reinsurance program; launching a statewide purchasing alliance; importing prescription drugs; launching a drug affordability board; and increasing transparency in hospital and prescription drug prices.<\/p>\n

Other than the importation plan, which has to be approved by the U.S. Food and Drug Administration, all of those agenda items have at least started to be put into practice. Most are in the early stages, however, making it difficult to assess if they\u2019ll succeed in bringing costs down.<\/p>\n

Colorado is ultimately pursuing two paths to lowering health care costs, said Bob Smith, executive director of the Colorado Business Group on Health. The Colorado option insurance plan is an example of setting rates, while the purchasing alliance is an attempt to negotiate better deals through the market, he said.<\/p>\n

\u201cI think the state is trying to see which of these two approaches will get better results,\u201d he said.<\/p>\n

Gov. Jared Polis disputed the idea that the state\u2019s testing two different philosophies and may ultimately pick a winner. It\u2019s going to take many strategies to address health care costs, he said.<\/p>\n

\u201cAmerica does health care poorly,\u201d he said. \u201cWe want good ideas from the left, the right, the middle.\u201d<\/p>\n

Colorado option<\/h4>\n

Unlike a full public option for health coverage, Colorado Option plans are run by insurance companies. The difference from other plans is that they\u2019re standardized, meaning that all option plans have similar out-of-pocket costs; they offer more services without co-pays or other direct costs; and they\u2019re required to reduce premiums by 15% over the next three years, adjusted for inflation.<\/p>\n

Not all Colorado Option plans met the 5% reduction for 2023<\/a>, though the majority of people who get their insurance through the marketplace have access to at least one plan that did, according to the Colorado Division of Insurance. In all counties, there is a silver-level Colorado Option plan that\u2019s cheaper than the average silver plan.<\/p>\n

About 35,000 people enrolled in Colorado Option plans this year, including about 10,000 who weren\u2019t eligible for tax credits because of their immigration status, but received state subsidies.<\/p>\n

The 25,000 who are citizens and could choose any plan represent about 13% of people buying on the individual market in Colorado, which is significantly more than Washington\u2019s public option captured in its first year, Colorado Insurance Commissioner Michael Conway said.<\/p>\n

\u201cA new product taking over 13% of the market is going to be eye-popping,\u201d he said.<\/p>\n

Adam Fox, deputy director of the Colorado Consumer Health Initiative, said that while the premiums were a disappointment, they may start to drop next year, when the state can hold hearings investigating prices.<\/p>\n

Also, it can be worthwhile to offer patients a health insurance option with fewer out-of-pocket costs and more incentives for primary care, he said. Customers don\u2019t have to pay for visits to their primary care or mental health provider, or for diabetes testing supplies.<\/p>\n

\u201cWhile they are not the lowest-cost plans, they are the highest-value plans,\u201d he said.<\/p>\n

Reinsurance<\/h4>\n

Reinsurance is one of the bigger success stories in efforts to bring costs down, even if people don\u2019t often think about it, Fox said. And since the state has long-term funding for it, the benefits will continue for at least the next few years, he said.<\/p>\n

\u201cColorado, or at least some parts of our state, were some of the most expensive (insurance) markets in the country,\u201d he said. \u201cThat\u2019s no longer the case because of reinsurance.\u201d<\/p>\n

It\u2019s essentially a backstop<\/a>, limiting how much insurance companies selling on the marketplace have to pay out if a customer\u2019s care exceeds $30,000. The amount of assistance they get depends on what part of the state the customer lives in, with more money available in more-expensive markets where people have fewer choices for insurance.<\/p>\n

Insurance companies are required to spend 80% of the premiums they collect on customers\u2019 care, so if the amount they\u2019re on the hook for goes down, so do premiums. That decrease has been largely overridden by other increased costs, meaning reinsurance has been more of a method to limit rate hikes than to bring rates down.<\/p>\n

Connect for Health Colorado estimated<\/a> premiums for 2023 would have been about 20% higher without reinsurance.<\/p>\n

Purchasing alliance<\/h4>\n

The state employee health plan and other partners in the Colorado Purchasing Alliance<\/a> are trying to steer employees toward hospitals that get better results at lower prices. It\u2019s too early to tell if the incentives the state is offering to employees who pick higher-value providers using its decision tool will result in a notable savings, though.<\/p>\n

Ultimately, health care costs aren\u2019t a problem the state can solve alone, since about half of Coloradans work for employers who aren\u2019t based here, Smith said. Right now, the purchasing alliance is working with national employers to set quality standards \u2014 say, the percentage of patients with diabetes whose blood sugar should be under control \u2014 which local doctors can meet however they deem best, he said.<\/p>\n

\u201cHow you improve, where there\u2019s room to improve, is very local,\u201d he said.<\/p>\n

Drug importation<\/h4>\n

If the FDA approves the importation of drugs, participating residents could save up to 65% on certain common medications, for a total savings of $53 million to $88 million, the Colorado Department of Health Care Policy and Financing estimated. Colorado law would allow the state to import drugs from other countries, but federal law only allows that arrangement with Canada at this point.<\/p>\n

The FDA still hasn\u2019t approved similar proposals from Florida, New Mexico and New Hampshire, which submitted them more than a year ago<\/a>. The Canadian government has opposed importation plans because of concerns that feeding the much-larger American market could lead to shortages.<\/p>\n

FDA Commissioner Dr. Robert Califf said in an interview that he couldn\u2019t comment on specific states\u2019 proposals, but that the quality of the plan a state puts forth will be an important factor in determining how quickly it can move forward.<\/p>\n

Colorado has been able to learn from other states\u2019 mistakes and should have a smoother process, said Kim Bimestefer, executive director of the state Department of Health Care Policy and Financing. The state already has identified partners to import, test and distribute the drugs from Canada, she said.<\/p>\n

\u201cFlorida got a little ahead of their skis,\u201d she said. \u201cThat\u2019s OK. We learned from Florida.\u201d<\/p>\n

Drug affordability board<\/h4>\n

The prescription drug affordability board<\/a> is still finalizing its rules, and is expected to start reviewing drugs in March.<\/p>\n

The board will be limited to setting maximum prices for 12 drugs a year, for three years. Members of the public can ask the board to review certain drugs, and a review is triggered if a drug\u2019s price increases 10% within one year; a brand-name drug costs more than $30,000 per year; or a generic drug costs $100 or more per month.<\/p>\n

How effective the board is will depend on how aggressively it sets its maximum prices; how many people take the drugs it is regulating; and whether there are any unintended consequences, such as drugmakers refusing to sell in Colorado.<\/p>\n

Price transparency<\/h4>\n

In June, Polis signed a bill prohibiting hospitals that haven\u2019t posted their prices from suing patients<\/a> or sending them to collections over unpaid medical bills. The state doesn\u2019t enforce the law, however; patients who believe a hospital pursued aggressive tactics improperly have to sue to get their debt forgiven and collect damages.<\/p>\n

No one tracks these cases, so it\u2019s not clear if anyone has sued, and if so, if they were successful. It\u2019s possible that the chance of a lawsuit could discourage hospitals from sending patients to collections, or encourage more transparency in posting prices.<\/p>\n

The Colorado Hospital Association reports the vast majority of facilities are complying with federal laws on posting prices, while patient advocacy groups<\/a> say they frequently find holes in the price lists on Colorado hospitals\u2019 websites.<\/p>\n

The Centers for Medicare and Medicaid Services ultimately decide who\u2019s in compliance, but they only fined two hospitals nationwide<\/a> for not posting prices in 2022.<\/p>\n

Transparency can be helpful for people who are scheduling care, but it doesn\u2019t do much for those who have a medical emergency, Fox said.<\/p>\n

Discounted hospital care law<\/h4>\n

Colorado hospitals are now required to screen uninsured patients to see if they qualify for discounted care, based on their incomes. People can opt out of the screening.<\/p>\n

No one is tracking how many people received large bills before and after the law took effect, but Fox said that fewer people have been calling the Colorado Consumer Health Initiative asking for help in the months since.<\/p>\n

\u201cWe\u2019re already seeing some benefits from our consumer assistance program,\u201d he said.<\/p>\n

Insulin price cap<\/h4>\n

Colorado caps the monthly out-of-pocket cost for insulin at $100<\/a> in health insurance plans regulated by the Division of Insurance. People who are uninsured or have a plan that isn\u2019t state-regulated can apply for a program that lets them purchase insulin for $50 a month.<\/p>\n

No one tracks how many people have taken advantage of the cap or how much they\u2019ve saved. But people with diabetes have reported they have an easier time affording their insulin, Lt. Gov. Dianne Primavera said. Primavera heads the Office of Saving People Money on Health Care.<\/p>\n

\u201cBehind every number, there\u2019s a person,\u201d she said.<\/p>\n

More to come?<\/h4>\n

The Department of Health Care Policy and Financing expects to publish a review of hospitals\u2019 compliance with posting prices in February and to roll out tools for comparison shopping in June. That\u2019s separate from an existing tool for providers to compare the cost of similar drugs, which the department estimated 43% of prescribers who see Medicaid patients are using.<\/p>\n

Some laws targeting health costs that passed last year won\u2019t take effect until 2024. One of those is House Bill 1370<\/a>, which will require insurance companies to pass drug rebates they receive onto customers. The Division of Insurance estimated that rebates account for about 21 cents of every dollar spent on brand-name drugs, though the amount of savings will vary.<\/p>\n