Colorado health insurance exchange board approves fee increases


The board for Colorado’s healthcare insurance exchange approved a hike in fees on insurance customers Thursday. The money raised will help pay to keep Connect for Health running as $177 million in federal startup money is phased out.

The vote came just a day after a legislative oversight committee gave exchange leaders an earful of criticism over the marketplace's performance and potential fiscal sustainability.

The board voted unanimously to raise both a fee on all health insurance customers, as well as a fee on people who buy insurance through the exchange. That second fee will more than double on 2016 plans, to 3.5 percent of the premium cost, or $84 on a plan that costs $4,000 a year.

The fee hikes will generate an estimated $40 million for the 2015-16 fiscal year. The money is expected to pay for operations, but the exchange will need to use reserves for new expenses, like upgrading its computer system.

“I think we’re working on all the right things to make the organization sustainable,” said Gary Drews, the outgoing interim CEO.

Several board members said other revenue sources need to be explored. They said Medicaid, for example, needs to help pay for a shared signup system that’s helped thousands of Coloradans enroll in that federal program. Dr. Mike Fallon, the board secretary, said "Medicaid is not paying their share of the services we are providing."

Right now, the federal insurance program for people with little or no income isn’t paying the exchange back to sign up those enrollees. In other states Medicaid is contributing $10 million or more for similar programs.

The exchange's new interim CEO, Kevin Patterson, says he believes the exchange and the state agency that administers Medicaid will reach agreement on future payments.