Insurance regulators in Colorado have come up with blue-violet compromise on the rules for short-term health insurance.
The administration of President Donald Trump has been trying to create extra competition for individual major medical plans that comply fully with the Affordable Care Act by making federal short-term health insurance rules much more flexible. One major provision lets states make new short-term health insurances renewable for up to three years.
Some Republican "red" states have been moving toward making their own short-term health insurance rules more flexible.
California responded by banning the sale of short-term health insurance policies.
Colorado — a state with a Democratic governor, one Democratic senator, and one Republican senator — has adopted short-term health insurance regulation changes that lean toward the "blue," Democratic end of the political spectrum but will continue to allow the sale of short-term health insurance policies that are somewhat different from ACA-compliant major medical coverage.
The Colorado Division of Insurance has adopted regulation amendments that keep the state's current six-month duration limit on short-term health insurance.
The revised regulation will also apply many ACA major medical standards to short-term health insurance policies.
Under the rules in the new regulation update, a "short-term, limited duration health benefit plan" must cover the same essential health benefits an ACA-compliant major medical policy must cover. A short-term health insurance policy must, for example, cover prescription drugs, hospitalization, maternity care and newborn care.
The issuer must sell the coverage on a guaranteed-issue basis and cannot use an applicant's personal health information to set rates.
The only factors an issuer can use in pricing are the same factors an issuer could use when pricing major medical coverage, such as age, family size, location and tobacco use.
The issuer would have to spend at least 80% of the premium revenue on health care.
