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The website for Connect for Health Colorado, the state's health insurance exchange, shown in October 2018. (Eric Lubbers, The Colorado Sun)

Colorado will become the first state in the country to require certain health care plans to cover comprehensive health services for transgender people, the state and federal governments announced Tuesday.

The state will also add two more required benefits for those plans: an annual mental health wellness exam and prescription coverage for treatments that are alternatives to opioid painkillers, including acupuncture.

The changes will take effect starting in 2023. They apply only to coverage offered to small employers and coverage available to people who buy health insurance on their own, without help from an employer. Combined, those two segments of the market cover about 500,000 Coloradans.

“We hope this marks a historic beginning and that other states look to Colorado as a model,” said Chiquita Brooks-LaSure, who, as the administrator of the federal Centers for Medicare & Medicaid Services, is one of the Biden administration’s top health officials.

The benefits were added to the state’s “benchmark plan” following an extensive review process at the Colorado Division of Insurance that included meetings with insurance companies and other stakeholders. The benchmark plan is a kind of minimum blueprint that insurance companies offering plans in the individual and small group markets must follow. The changes mean that the new benefits will be considered essential, similar to previously designated essential health benefits like cancer treatment or maternity care.

Large companies that are self-insured or that shop for plans on the large-group market do not have to follow the benchmark plan because they operate under a different set of laws. Changes to the state’s benchmark plan can influence the kinds of benefits covered in those markets, though.

“Gender-affirming care can be life-saving,’ Brooks-LaSure said. “By making this care essential, the benchmark plan will guide what is included in health coverage statewide.”

The changes include:

  • Requiring insurers to cover a comprehensive set of gender-affirming treatments for transgender individuals, including certain surgical procedures, hormone therapy and mental health care. Currently, insurers are required to cover some level of gender-affirming care, but the changes standardize and expand that requirement.
  • Requiring insurers each year to cover one mental health wellness visit of up to an hour with a qualified mental health care provider.
  • Expanding the number of drugs and treatments that insurers are required to cover as alternatives to opioid painkillers. The plan adds 15 non-opioid drugs to what must be covered, though an actuarial analysis notes that many insurers are already covering them.
  • Requiring coverage for up to six acupuncture visits per year.

An actuarial analysis found that the new benefits would add little to the overall cost of insurance. The analysis estimated the benefits would increase the total cost of allowed claims by 0.16%.

Colorado Insurance Commissioner Michael Conway speaks at a public forum in Frisco on Feb. 21, 2020. (John Ingold, The Colorado Sun)

“What we found is that the cost of all of these pieces we’re building into the benchmark is negligible,” said Michael Conway, the state’s commissioner of insurance. “… And the long-term benefits of including these benefits is huge.”

Gov. Jared Polis also cited the long-term benefits of the changes, saying they would ultimately drive down health care costs across the state. He used opioid use as an example. Treating addiction to the drugs is expensive — not to mention all the other health and economic costs that are associated with opioid misuse.

“Preventing that,” he said, “by offering alternatives for pain management and offering alternatives for recovery from opioid dependency absolutely saves money on health care and saves lives.”

In an email, Amanda Massey, the executive director of the Colorado Association of Health Plans, said her organization “fully supports ensuring that all Coloradans have access to high quality, affordable care.” But, she said, the industry’s own analysis estimates higher cost increases for the changes than the state’s: up to about 1.5%.

Combined with other changes to required benefits made at the legislature, Massey said that will make it difficult for insurers to meet the price-reduction requirements set out in another big Polis health coverage initiative, the Colorado Option.

“Additional benefits come with additional costs that by law must be reflected in the price of premiums,” Massey wrote. “… This does not save people money on health care and will make meeting premium reduction targets for the Colorado Option even more unlikely.”

John Ingold is a co-founder of The Colorado Sun and a reporter currently specializing in health care coverage. Born and raised in Colorado Springs, John spent 18 years working at The Denver Post. Prior to that, he held internships at...