A bill pending in the Colorado Legislature could lower insurance premiums for those who purchase insurance through the state health exchange.
In La Plata County, about 3,000 people purchased insurance for 2019 through Connect for Health Colorado, the health exchange set up by the Affordable Care Act. In Montezuma County, about 800 customers purchased insurance through the exchange.
Customers in Southwest Colorado are among those paying higher health insurance premiums compared with those on the Front Range, yet have fewer options for insurance coverage.
A reinsurance program proposed in House Bill 1168 directs the state insurance commissioner to lower premiums for Western Slope customers by 30 to 35 percent. The bill also lays out savings for other areas of the state.
The measure introduced in February stands a good chance of passing because it has strong political backing from Gov. Jared Polis and senior Democrats, experts say.
“It’s an important idea to try to stabilize and lower the premium costs as quickly as we can,” said Adam Fox, director of strategic engagement at the Colorado Consumer Health Initiative.
Legislation is also pending that would create a public option for health insurance, but it would likely take longer to implement, he said.
The reinsurance program would create a fund that insurance companies could use to cover high-cost claims from customers.
The fund would lower the financial risk for insurance companies, and, as a result, lower premiums for customers, said Joe Hanel, spokesman for the Colorado Health Institute.
The Division of Insurance would determine how much insurance companies would have to pay before they could use the reinsurance fund, according to the draft bill. The division would also determine how much medical providers would receive if the reinsurance funds cover the health care bills, according to the legislation.
The state plans to apply for federal funding to cover the high cost claims, according to the draft bill.
It is not a guarantee that Colorado would receive federal funding for the program, but other states have used federal funding to set up similar programs that have lowered insurance costs, Hanel said.
The federal funding could come from the federal tax credits that would otherwise be provided to individuals, he said. Both those who qualify for tax credits and those who don’t could see savings as a result of the new reinsurance program.
“It’s a way of spreading the wealth of the tax credits to the people who don’t qualify,” he said.
The exact savings consumers could see as a result of the reinsurance fund requires more study, said Vincent Plymell, a spokesman for the Division of Insurance.