Face the State

Gardner's health insurance system would be first of its kind in nation
Face The State Staff Report

DENVER – Colorado would become the first state in the country to allow its citizens to purchase out-of-state health insurance under a bill proposed by Rep. Cory Gardner, R-Yuma.

Legislators took up the bill, HB 1327, in the House business affairs committee Wednesday and held the issue over for discussion without taking a vote. In exercising his discretion to pull the bill for further work, committee vice chairman Joe Rice, D-Littleton, said “everybody thinks [the bill] has merit.”

GardnerState of Colo.

Currently, state law permits health insurers to sell only policies in Colorado that comply with state regulations and mandates on care, even if the same company does business in other states. Consequently, there is no national market for health insurance, unlike life insurance or banking services, which are regulated by states but may be purchased across state lines.

Politicians on both sides of the aisle have put forward plans to increase access to healthcare to reduce the roughly 17 percent of Coloradans who are not currently covered by a health insurance plan of any kind. A recent report by the state's highly publicized health care reform panel, commonly known as the "208 Commission,” analyzed state healthcare options and proposed significant increases in state spending to cover many of those uninsured with a highly-subsidized state policy. Lawmakers have not yet introduced legislation to enact that proposal, citing its multi-billion dollar price tag.

Gardner says the “vast majority” of those uninsured individuals are employed, but choose not to participate in their employer’s plan, if offered, or find the cost of insurance premiums too prohibitive. One source of that high cost, he says, is a laundry list of state mandates on insurance companies for a wide range of procedures. Insurance companies in other states may offer plans more tailored to an individual’s needs for coverage at a lower price, he said.

The out-of-state policies would remain under the regulatory control of the primary state in which the policy is written, but the Colorado Division of Insurance would retain authority to pursue relief on behalf of consumers harmed by fraud or dishonest claim practices.

Some groups purporting to advocate for greater access to healthcare, including the Colorado Consumer Health Initiative, testified against the legislation at Wednesday’s hearing.

Dede de Percin, CCHI’s executive director, said “Allowing people to purchase plans outside Colorado erodes consumer protections,” and argued that in-state health plans were “hugely flexible,” as currently offered. That group is publicly affiliated with the SEIU labor union, the Colorado Progressive Coalition and the Bell Policy Center, groups supportive of a large-scale expansion of government-funded healthcare and key allies of the democrat majorities in both the state House and Senate. That coalition plans a “Day of Action” at the capitol on March 3.

Mike McGuire, a volunteer lobbyist for AARP, expressed that group’s “strong opposition” to the bill, arguing it would “lead large numbers of Coloradans to be underinsured.” When asked by committee members how his organization's endorsement of nationally-marketed insurance products affected its position, McGuire reported he was not familiar with the AARP's offerings. Both the AARP and Rocky Mountain Farmers Union, who also oppose the bill, market insurance products to their members.

Gardner disagrees, saying his plan would allow individuals, including seniors, more choices in the insurance market. He adds that no-one would be required to purchase insurance from out of state, and the bill makes no changes to regulations governing in-state insurance.

“We shouldn't be defending the status quo, an entrenched bureaucracy," he said. "Coloradans aren't nitwits. We just need to give choice and break down barriers."

Cindy Sovine, representing the Colorado Child Care Association, says leaders of that organization have a clear message on that issue of choice. “Don’t let them think we aren’t smart enough to make our own decisions on these things,” she said, reporting the sentiments of one association member. Sovine added that while many child care workers across the state may elect to purchase health insurance through an employer, many choose not to because of cost concerns or a lack of employer-sponsored choice.

A similar plan for a nationwide health insurance market has been introduced by U.S. Rep. John Shadegg, R-Ariz., but has failed to gain traction toward a vote of the U.S. House of Representatives.

The Colorado version would instruct the state Commissioner of Insurance, Marcy Morrison, to negotiate interstate agreements which would articulate the responsibilities of both the primary state of domicile for the policy and the secondary state of the insured. Morrison testified against the proposal, saying she was not convinced the new policies would "increase access" in the individual insurance market.

"We have to separate ourselves from the normal free-market business approach to health insurance," Morrison said.

Editor's note: This item originally indicated the bill was heard in the House state affairs committee; it was actually heard in business affairs. We regret the error. Readers are encouraged to write newstips@facethestate.com with any notes on our news coverage.