Colorado DOI issues statement on President's executive order on health insurance
"Will fracture the health insurance markets."
DENVER (October 12, 2017) – On Thursday, President Trump signed an executive order that looks to expand the use of association and short-term health insurance plans. In response to this order, the Division of Insurance, part of the Department of Regulatory Agencies (DORA) issued this statement from Insurance Commissioner Marguerite Salazar.
“Expanding association health plans and short-term health insurance without ACA protections will fracture the individual and small group markets. The limited benefits, the focus on the healthy at the expense of those with pre-existing conditions, and lack of regulatory oversight will cause problems for the health insurance market as a whole.
“As association plans would not have to follow most insurance regulations, especially at the state level, there would be limited oversight, especially concerning financial solvency. Employers purchasing such plans for their employees will end up with serious questions about the value of these plans. Some employers may even find the coverage they were sold to be practically worthless, as they end up bearing the full cost of the services provided to their employees and dependents. With limited oversight of these plans, who will employers and employees turn to when they have problems with what they purchased ? And the employers who maintain plans with better coverage for their employees will see their costs continue to climb.
“In the individual market, under this executive order, cheaper, less comprehensive short-term plans may be able to exclude people with pre-existing conditions and focus on healthy individuals. This creates an imbalance in the insurance market, where people will purchase short-term plans until they get sick, and then want to move to better coverage under the ACA plans, making those plans prohibitively expensive. And those with serious health conditions would remain on the exchanges, driving up premiums even more.
“The limited benefit requirements for association and short-term plans will be detrimental to those with health needs. Premiums may end up being lower for people buying these plans, but for many, paying for services not covered by the plans will be much more costly in the long run. Doing away with these standards, as proposed, could spell the demise of employer provided insurance, especially for small employers, and exacerbate the crippling costs associated with inadequate insurance coverage.
“Currently, it appears that the executive order will not impact open enrollment for 2018 and the plans available. In addition, many of the details for this order will need to be determined through Federal rulemaking actions. The Division has many questions about what these proposals really mean for Colorado consumers, but we will continue our mission of consumer protection by ensuring that Colorado laws are still followed when possible under this order.”
The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA) regulates the insurance industry and assists consumers and other stakeholders with insurance issues. Visit dora.colorado.gov/insurance for more information or call 303-894-7499 / toll free 800-930-3745.
DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit dora.colorado.gov for more information or call 303-894-7855 / toll free 1-800-886-7675.