I have often wondered about the feasibility of Cover Colorado expanding their eligibility in order to attract healthier applicants and perhaps improve their loss ratio. Cover Colorado – the state high risk pool health insurance policy – has claims expenses that far exceed premiums collected. Fees on private health insurance companies and a grant from Medicare help to make up the difference.
Cover Colorado is a reasonably-priced alternative for people who aren’t eligible for private health insurance. It’s also available for those who have been offered a private policy with a rate higher than Cover Colorado’s, or with an exclusion on a particular pre-existing condition. But this basically means that the insureds in the Cover Colorado system tend to be some of the state’s sickest residents. Group health plans also have plenty of sick people (since group policies have to accept all eligible employees of an insured business, regardless of health), but they also have lots of healthy people. Since Cover Colorado basically requires that an applicant have pre-existing conditions, their claims to premium ratio is understandably high.
An article in the Denver Post yesterday indicated that perhaps someday Cover Colorado will expand their eligibility. Apparently it is being discussed as a possibility, although funding is the major hurdle. The most obvious benefit would be the rise in premium revenue that would be collected if more people were to join the pool – and if those people were healthy, the premiums to claims ratio could be expected to improve over time.
It wouldn’t be fair to expect private health insurance companies to continue to subsidize the Cover Colorado program at the current levels if healthy people were allowed to join, but perhaps the increased premium revenue would make up the difference.
I’m glad that we have Cover Colorado as an option here, and I’m well aware that there are states where people who don’t qualify for private health insurance have no option at all. But there are some eligibility guidelines for Cover Colorado that still end up leaving people uninsured or under-insured. The six month residency requirement is a tough one, and it’s only waived for people who are moving from another state’s high risk pool. People who are coming off of a group health insurance policy in another state (and who are unable to qualify for a private individual policy) have to live here for six months – uninsured – before they qualify for Cover Colorado. In addition, a person who is eligible for any group health insurance policy – regardless of how bad the coverage might be – is not eligible for Cover Colorado.
My vote would be for relaxing both of these guidelines. That would no doubt increase the number of sick people enrolling in the program, but it would also help to expand health insurance coverage and access to health care to more people, which should be the ultimate goal. In order to make up for the additional losses created by enrolling more high-claims people in Cover Colorado, perhaps eligibility could be expanded to include some of the state’s healthy – but currently uninsured – population. Obviously the premiums are the major issue here (Cover Colorado is currently more expensive than private health insurance), but I’m glad to see that people are considering this as a possibility for insuring Colorado’s uninsureds.
There isn’t likely to be any one solution that will insure all 800,000 Colorado residents who currently are without health insurance. But perhaps expanded eligibility for Cover Colorado might be part of the solution.
