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Colorado reinsurance health care program gets federal approval

By Diane Carliner | The Center Square

Colorado Governor Jared Polis announced this week that the federal government approved the Colorado health reinsurance plan to reduce premiums for the seven to eight percent of residents in the state who do not receive health insurance through an employer or government program. 

Premiums are expected to decrease by 18.6 percent for 2020, according to the Division of Insurance (DOI), part of the Department of Regulatory Agencies.

“For the first time in history, Coloradans in the individual health insurance market will save an average of 18.2 percent next year,” Polis said, referring to the average rate change reinsurance calculations listed by the DOI.

“Bringing down the outrageous cost of health care 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,” Polis added. “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.” 

Created by House Bill 1168, the reinsurance program pays health insurers a portion of high cost claims such as those incurred after major accidents or those due to serious health conditions or hospitalization. As insurance companies will no longer be required to pay that portion of high dollar claims, they can lower the premiums for individual health insurance. 

The plan will cost taxpayers about $237 million. Approval for the federal portion of the program was granted to the DOI by the Centers for Medicare and Medicaid Services (CMS).

“This approval highlights Colorado as a leader in making the individual health insurance market affordable and accessible for its citizens. I am proud of all the work over the last three years that the DOI has put into making this possible, as well as the support of Governor Polis and the Legislature. Bold actions require bold leadership,” noted Michael Conway, the state’s insurance commissioner.

The state insurance companies designated to receive an aggregate reduction in rates of 18.6 percent but with individual amounts varying between 34 percent and 15.4 percent are Anthem (HMO Colorado, Inc.), Anthem (Rocky Mountain Hospital & Medical Service, Inc.), Bright Health Insurance Company, Cigna Health and Life Insurance Company, Denver Health Medical Plan, Friday Health Plans, Kaiser Foundation Health Plan of Colorado, Oscar Insurance Company and Rocky Mountain HMO.

For the remainder of the summer, the DOI will continue to review the plans and premiums for 2020 for the individual health insurance market that were submitted by the insurance companies listed above. The final, approved plans and premiums will be made available in late September or early October. 

This type of health insurance plan not covered by private or government employers is available on the connect for Health Insurance Exchange, the state’s health exchange made possible by the Affordable Care Act. 

House Bill 1168 also directs the DOI to study the effects of the program after two years, focusing on affordability and the impact to consumers eligible for Affordable Care Act tax credits.

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