Colorado’s Health Reinsurance Plan To Lower Exchange Premiums Awaits Federal Approval

Jim Anderson/The Associated Press
Colorado Gov. Jared Polis touts the Democrat-led legislature’s accomplishments in tackling health care costs at a state Capitol briefing on Friday, May 3, 2019, in Denver.
Photo: Gov. Polis Health Care Bills 2019 - AP
Colorado Gov. Jared Polis touts the Democrat-led legislature's accomplishments in tackling health care costs at a state Capitol briefing on Friday, May 3, 2019, in Denver.

Colorado is a step closer to creating a program designed to lower health insurance premiums on the Affordable Care Act individual market.

If approved by federal officials in Washington, D.C., a state reinsurance program could help about 250,000 Coloradans who buy health coverage on the market set up under former President Barack Obama's health care law.

Reinsurance allows private insurers to lower premiums by having the state take on their highest-cost cases.

Colorado's application for approval is complete, the Department of Health and Human Services told state Insurance Commissioner Mike Conway on June 5. A final decision is expected within 180 days.

Gov. Jared Polis' office said Thursday the decision could come sooner — allowing the state to embark on a program that analysts say could lower individual market premiums by 21 percent statewide in 2020. Rural and mountain residents could see greater reductions of at least 27 percent.

Fourteen of Colorado's 64 counties have just one insurer for the individual market, and monthly premiums there can be $500 higher than in metropolitan Denver.

Polis signed bipartisan legislation in May to create the program. It's one of several measures advocated by Polis to reduce health care costs and increase accessibility for Colorado residents.

"Coloradans in rural, suburban, and urban communities are tired of stretching their wallets to pay for health care," Polis said in a Thursday statement.

Federal approval is needed because roughly two-thirds of the reinsurance program will be paid for with federal funds currently used for tax subsidies for patients purchasing insurance under the Affordable Care Act.

At least seven states have seen rates drop by as much as 20 percent after adopting reinsurance programs, according to the National Council of State Legislatures. Others are seeking U.S. approval.