COD E R E D

The federal share for CHP+ is 65 percent for FFY2005 and the state share is 35 percent of eachdollar spent. Colorado spent $62.5 million on SCHIP in FY 2003, including both federal andstate funds. As of December 2003, there were 49,978 children enrolled in CHP+. 322 To qualifyfor CHP+, a child must be younger than 19, a U.S. citizen or legal resident, not eligible forMedicaid or state employee coverage, not have private insurance, and have a family incomebelow 185 percent of the federal poverty level. Colorado instituted an enrollment freeze fromNovember 1, 2003 to June 30, 2004 due to insufficient funds. This only applied to CHP+ —Medicaid enrollment cannot be limited and applications are screened for Medicaid eligibility. 323CHP+ is a public-private partnership, in which many of the services are provided by privatecontractors. Services are provided primarily through managed care. Four HMOs have full-riskcontracts with the state to provide services to 39 counties, representing 84 percent of the CHP+caseload. 324Private Insurance RegulationColorado has a 27.2 percent HMO penetration rate. Regarding small-group market reforms(applies to groups of 1-50), Colorado does apply community rating, limits pre-existing conditionexclusions (to 6 months exclusion and 6 months look-back time), and mandates guaranteedissue and guaranteed renewability. Regarding individual insurance market reforms, Coloradodoes not apply community rating, does not limit pre-existing condition exclusions, and mandatesguaranteed issue and guaranteed renewability. Colorado has a high risk pool calledCoverColorado and funded by the unclaimed property trust fund, premiums, the CoverColoradocash fund and assessments on insurers. The state mandates that patients have access to anexternal review board for filing complaints against their health plans, and mandates mentalhealth parity of benefits. Colorado has a state COBRA expansion program to 18 months forsmall firms. 325Incentives for Small GroupsColorado’s small group reforms began in 1995. Currently, all small groups with 2 through 50employees can purchase one of two plans (Basic and Standard) that have to be offered by allsmall group carriers, regardless of employee health status. Self-employed persons, referred toas a “Business Group of One” (BG1), also fall into the definition of small group. To qualify as aBG1, an individual must provide detailed documentation of sole proprietorship status. 326Rates for all small group plans can vary by age, region, family size, and factors like smokingstatus, health status, claims experience, and standard industrial classification (workplace andjob characteristics). Rates are allowed to range from a discount of 25 percent to an increase of10 percent dependent on the health status of group members. Guarantee issue is required ofall small group plans offered in the state, not just the Basic and Standard plans. 327SCHIP and Medicaid Initiatives1915(b) Managed CareIn 2003, 95.3 percent of Colorado’s Medicaid beneficiaries were enrolled in managed care, ascompared to 60.2 for the U.S. as a whole. 328 This rate has dropped significantly recently forreasons that will be explained below.In the mid-1990s Colorado made a dramatic shift to managed care with the hope that this wouldbe a money-saving strategy for the state. In 1995 the state was granted a 1915(b) waiverC-22