Colorado insurance commissioner warns Trump health care order could spell end of employer coverage

DENVER – Colorado’s insurance commissioner said Thursday afternoon that President Trump’s executive order aimed at solving his promise to repeal and replace the federal health care law will “cause problems” for the state’s health insurance market and warned it could end employer-provided coverage in the state.

“Expanding association health plans and short-term health insurance without [Affordable Care Act] protections will fracture the individual and small group markets,” Insurance Commissioner Marguerite Salazar said.

She warned the executive action, which he says will help millions get “affordable” insurance, would instead benefit mostly healthy people, while leaving those with pre-existing conditions paying higher costs.

“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,” Salazar said.

The White House has touted the order as directing the Labor Department to conduct a study to find out how small businesses can switch over to using national association plans, which would allow employers to offer group plans across state lines and offer plans not up to the standards of the ACA, also known as Obamacare.

The order would also allow individuals to buy short-term plans the ACA doesn’t allow for, which analysts say could benefit healthy people who need short-term insurance and don’t feel they need to be covered year-round.

But critics like Salazar worry that people covered by ACA programs wouldn’t be able to get the necessary benefits under the skimpier plans, and that when healthy people go on the plans and leave the ACA marketplace, that insurance premiums could go into a so-called “death spiral.”

Salazar said in the individual marketplace, which makes up only about 7 percent of those covered nationally and under 10 percent in Colorado, that’s exactly what would happen.

“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,” Salazar said.

“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.”

And she added a foreboding warning about what might happen to employer-sponsored coverage.

“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.”

But Salazar says that at the moment, “it appears” that the executive order won’t affect open enrollment for 2018 in Colorado, which starts Nov. 1. And she said that many of the order’s details will still have to be determined.

“The Division [of Insurance] 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,” she said.

Gov. John Hickenlooper, who has been on a months-long push with a panel of bipartisan governors to get bipartisan marketplace stabilization done, was equally apprehensive about the president’s order.

Both he and Salazar have blamed the administration for destabilizing the insurance marketplace in Colorado by continually trying to repeal, replace, or amend the Affordable Care Act in the middle of the time of the year states are finalizing insurers’ premium rate hike requests for 2018.

“The White House’s action today threatens to make health insurance more expensive and less stable. It sabotages the protections many Coloradans rely upon and makes it easier for insurance companies to deny Coloradans the care they need,” he said in a statement. “This order will destabilize health insurance for small businesses, ultimately resulting in higher premiums.”

Colorado Democrats in Washington were equally displeased.

Sen. Michael Bennet, who has repeatedly urged Congress to move ahead with the bipartisan Alexander-Murray talks in the Senate HELP Committee, which Bennet is part of, continued that urging after Trump unveiled his order.

“Although the president claims his executive order will increase competition and lower costs, it will weaken consumer protections, resulting in skimpier plans and higher health care bills for people with preexisting conditions. This is not a tradeoff the president should be willing to make,” he said in a written statement.

Rep. Diana DeGette said the order was “another clear attempt to sabotage and eventually destroy the ACA,” and called it a “misguided and dangerous effort.”

Adam Fox of the Colorado Consumer Health Initiative also said Trump was trying to “sabotage” the ACA, and said the order would “lead to some Coloradans buying junk insurance.”

“Insurers have already been struggling with the uncertainty created by senseless repeal efforts…and this will only increase uncertainty and instability in the individual market.”

Colorado Republicans were mostly mum on the order Thursday, but Sen. Rand Paul of Kentucky, a Republican who had opposed some Republican efforts to repeal and replace the ACA, called the order “one of the most significant free market health care reforms in a generation,” according to the Associated Press, adding that it would “reduce government interference and provide more affordable health care options to everyday Americans.”

Trump said “today is only the beginning” when announcing his order, and said he would “pressure” Congress “to finish the repeal and replace of ‘Obamacare’ once and for all.”

However, any changes are expected to take at least six months to take effect, according to the administration.