Many life insurance companies have, in the time since the recession ended, tried to do a lot more to reach consumers who might be interested in buying their policies but had not been able to do so in years past. Now, officials in the state of Colorado might be able to help them connect with such people in a new way, thanks to the insurance exchanges put in place by the Patient Protection and Affordable Care Act.
Colorado was one of the few states in the country to actually set up their own health insurance exchanges, rather than go through the federal government's Healthcare.gov website, and as such has more control over the types of policies that are sold in that marketplace, according to a report from the Denver Post. As such, Patty Fontneau, the executive director of Connect for Health Colorado, recently told state lawmakers that her agency plans to add other types of insurance offerings to the exchange - including group life insurance - so that it can better help companies in particular to find types of coverage their workers might want or need. The end result, in turn, could also be improved revenues for the state health exchange.
However, elected officials on the state's Legislative Health Benefit Exchange Implementation Review Committee say that they have concerns about allowing such policies to be sold on the state's market, the report said. State Sen. Ellen Roberts, a Republican representing Durango, specifically cited life insurance coverage as being "far afield" from the original intent of the exchange, advising that Fontneau return to the legislature to discuss how appropriate such a plan is.
The slippery slope argument
Specifically, Roberts seems to have concerns about what opening the exchanges up to new types of insurance, including life coverage, would mean for the ability of the state to get involved with selling other types of things, the report said. The marketplace is intended to be an independent nonprofit group, and as such lawmakers don't have actual regulatory control over what it does and does not sell. However, they could pass laws prohibiting specific things. Roberts wondered aloud whether such a change would lead to car sales or other types of offerings on the exchanges overall.
Insurers may want to keep a close eye on proceedings in Colorado because if they are able to sell group coverage to companies through the exchanges, that might be a big boon to their bottom lines going forward. It may also lead to other states adopting such practices.