Money health medical dollars

The federal government has approved a Colorado reinsurance plan designed to lower premiums for individuals buying insurance on the state health care exchange, Gov. Jared Polis announced Wednesday.

Premiums next year for 400,000 Coloradans — about 8% of those buying insurance on the exchange — will drop by more than 18% with a reinsurance plan in place, officials estimate.

The largest decreases in premium costs are expected for rural Coloradans who participate in the state's health benefit exchange program, Connect for Health Colorado, according to projections released by the governor.

The program will begin with 2020 coverage plans.

Under the program, the state covers the most expensive medical claims, allowing private insurers to lower rates for individuals participating in Connect for Health Colorado market.

The General Assembly approved the reinsurance program during the 2019 legislative session through House Bill 1168, sponsored by Democratic Sen. Kerry Donovan of Vail, Republican Sen. Bob Rankin of Carbondale, Republican Rep. Janice Rich of Grand Junction and Democratic Rep. Julie McCluskie of Dillon. 

Donovan said Wednesday that reinsurance is "a creative, Colorado solution that will have a real and immediate impact on people across this state. Families on the Western Slope could save as much as $9,000 per year thanks to the reinsurance program. Those savings are life changing for people like my neighbors who couldn’t buy a new car after theirs broke down because of the cost of their health insurance."

McCluskie added that she was "thrilled that the reinsurance program will move forward and that my Western Slope constituents and Coloradans across the state will see real, substantial reductions in their health care costs...Every Coloradan deserves access to high-quality, affordable health care services in the communities where they live - and this program is a key part of our plan to achieve that goal.”

Once the bill was signed into law, the state had to apply for a waiver from the federal Centers for Medicare and Medicaid Services, part of the Department of Health and Human Services. According to the National Conference of State Legislatures, as of late 2018, 35 states considered legislation to introduce reinsurance programs. Colorado lawmakers had attempted twice before to pass a reinsurance program.

At least eight states have now won approval for reinsurance programs.

In a statement Wednesday, Polis said the state was "thrilled" to announce the federal approval, which will "directly reduce health care premiums for hundreds of thousands of Colorado families."

"Bringing down the outrageous cost of healthcare in our state has been a top priority for my administration from the beginning, and this is a significant milestone on our way toward achieving that goal," he said. "We’re already seeing the direct impact this program will have on premiums on the individual market. That’s thousands of dollars in savings that Coloradans can put toward paying the mortgage, saving for college or retirement, taking a family vacation, or just living their lives.”

All nine members of Colorado's congressional delegation signed on to support the waiver. Republican Sen. Cory Gardner of Yuma, in a statement said, that “I’m very pleased the Colorado reinsurance waiver has been granted. I was a strong supporter of this effort with CMS to ensure sure we had a timely approval process — weighing in a number of times with CMS to get this waiver through and working with Governor Polis and others,” Gardner said. “This waiver will allow us to drive down insurance costs, provide better care across the state of Colorado, and I’ll continue working for bipartisan solutions to alleviate the damage and the harm from high health care costs.”

Early versions of HB 1168 drew opposition from health providers and the Colorado Hospital Association, but the CHA says it was neutral on the bill in its final form.

The CHA issued a statement Wednesday saying it hoped "the two-year reinsurance program – largely funded by hospitals – is effective in providing needed relief for patients from high insurance costs.

Katherine Mulready, senior vice president and chief strategy officer of the CHA, added that the "price of health insurance includes both the premiums and the copay and deductible costs, so this can’t just be about reducing premiums while insurers continue to raise out-of-pocket costs on Coloradans. We trust that the Polis Administration and the Insurance Commissioner will make sure insurers follow the law and that savings from reinsurance are fully passed on to consumers. Hospitals are doing our part to address health care affordability. It’s time for all stakeholders to come to the table and work toward comprehensive, long-term solutions that achieve access to high-quality, accessible and affordable health care.”

The Associated Press contributed to this report.

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