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Colorado Short-Term Health Plans

Colorado has a history of healthcare reform, leading the way even before the federal government implemented the Affordable Care Act (ACA). The state had made maternity coverage mandatory in the individual market and banned gender-based premiums before “Obamacare” became a reality.

The 2016 election saw a Colorado state ballot initiative known as Amendment 69, which would have created a single-payer healthcare system via a constitutional amendment. However, the proposed law was overwhelmingly defeated by voters.

Colorado has a state-run health insurance marketplace exchange with seven insurers participating, but coverage is spotty. Many counties have only one company offering plans under the ACA.

Another difference is Colorado state’s special enrollment period, which extends the opportunity to join a plan under Obamacare to two and a half months—through January 15, 2019. Regulations have been adopted that make this extension permanent for the future.

Unfortunately, not all this is good news for consumers. Some insurers are leaving the marketplace, and some individuals seeking to enroll experience delays.

Colorado short-term insurance laws are stricter than federal guidelines. These plans are limited to six months and aren’t renewable.

Temporary health plans also cannot be purchased by individuals who had coverage under more than one short-term plan in the prior year. This means that if a Colorado state resident purchased one short-term plan and then a second one, they’d have to wait at least six months before being able to enroll in another plan.

Short-term health plans are required to cover some state-mandated benefits such as maternity care, but other provisions aren’t covered such as prescription drugs and preexisting conditions, especially for chronic conditions. Maternity coverage is a sticky issue as pregnancies would only be covered if they occur after coverage begins and continue only for the plan duration – meaning a second short-term plan would deem the pregnancy a preexisting condition and only the first portion would be covered.

Temporary plans aren’t required to cover benefits such as hospital stays, outpatient surgery, and other benefits. Due to the differences in the state’s laws, consumers should carefully evaluate any healthcare plan prior to enrolling.

Colorado recognizes that costly premiums are a problem for the state’s residents. In 2017 and again in 2018, legislators proposed a law creating a financial relief program for people who spend 15 percent of their household income on individual health insurance premiums but don’t qualify for ACA subsidies. This bill passed the House, but failed in the Senate.

Colorado short-term health plans have become a viable option while Colorado residents wait for lawmakers to address major medical premiums that many consumers simply cannot afford.

New Regulations

In 2018, the Trump administration issued a final rule allowing short-term plans that don’t comply with the Affordable Care Act (ACA). Trump indicated that “short-term, limited-duration insurance” could help millions who couldn’t afford major medical coverage or didn’t want it. Because temporary insurance isn’t ACA-compliant, many consumers didn’t take advantage of lower-cost policies until the “individual mandate” was repealed. This provision of Obamacare required policies to meet with federal standards of essential coverage; otherwise, taxpayers would be fined unless they qualified for an exemption.

Colorado Health Insurance

Consumers should be aware that Colorado short-term health plans don’t comply with the ACA, and don’t meet the test for “essential health benefits” (EHB) as defined by the state of Colorado. These plans include a lengthy list of free preventative services in addition to ambulatory patient service, emergency visits, hospitalization, pregnancy, maternity and newborn care, mental health, substance abuse, and behavioral health treatment, prescription drug coverage, and rehabilitative and habilitative services and devices.

In Colorado, plans that don’t meet the criteria for essential health benefits include Workers’ Compensation, vision and/or dental care, policies for a specific disease or condition, and plans that offer discounts only for medical services. Short-term, limited-duration insurance doesn’t meet Colorado state’s guidelines.

Temporary plans come with benefit limits and, when policies end, they don’t trigger the Special Enrollment Period (SEP) for reentering marketplace exchanges. Short-term plans often preclude individuals from seeking policies through the marketplace outside of Open Enrollment, a period at the end of each calendar year that allows consumers to apply for coverage.

Colorado short-term plans have much lower monthly premiums due to the limitations of covered services. For those who are young, in very good health, and who use little in the way of medical services or prescriptions, this type of coverage may be a viable option.

For many individuals, short-term health plans have become an alternative for having healthcare coverage when their employer doesn’t offer major medical coverage or they deem it as being too expensive – a situation whose reality lawmakers have already acknowledged. Temporary coverage may be a solution while seeking resolution to this issue.

Colorado Short-term Plans

There are nearly 16 different Colorado short-term health plans with a wide range of benefits and covered medical expenses. Duration of these temporary health plans varies from three months to the state’s maximum of six months.

Deductibles range from $1,000 to $10,000 or more. Coinsurance ranges from ten percent to 50 percent and above.

Maximum coverage amounts are $1 million. Colorado consumers are urged to review plan restrictions and limitations when evaluating short-term plans.

Also, keep in mind that Colorado short-term health plans don’t meet the ACA’s guidelines for minimum essential coverage (MEC). Be sure to review plan details for exclusions and limitations.

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