As Director of CCLP’s Health Care program, Bethany works with staff on setting the program’s priorities and leads its advocacy work. Her areas of expertise include regulatory analysis and advocacy for Medicaid and commercial coverage, access to behavioral health benefits, Medicaid eligibility and much more.Staff page ›

Apr 26, 2018

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Colorado takes steps to shore up markets and protect consumers

by | Apr 26, 2018

Since the passage of the Affordable Care Act (ACA) eight years ago, Colorado has jumped on opportunities to improve health care access for its residents, expanding Medicaid coverage and creating a state-based health insurance exchange where Coloradans can take advantage of federal subsidies that help pay for the cost of coverage.

With the feds now in the process of undercutting the ACA, Colorado has an opportunity – through House Bill 1392, the Individual Health Insurance Market Stabilization Act – to use reinsurance to stabilize a market that the feds have knocked off-balance, and simultaneously to make premium prices more equitable for rural Coloradans. While Coloradans who qualify for subsidies can purchase more affordable coverage, those with incomes over 400 percent of the federal poverty level pay full price. Fortunately, HB 1392 and the reinsurance system could provide some relief from rising premiums.

Reinsurance works like this: a fund is created that helps cover costs for the most expensive enrollees in individual and small-group plans. Because insurance carriers know they’ll have help covering the highest cost enrollees and will bear less risk, they can set premium prices lower for everyone. Those lower premiums make coverage more attractive to the healthy individuals who might otherwise skip having coverage – a problem worsened since the federal government gutted the “individual mandate” that required us to get covered.  Bringing more healthy individuals into the risk pool helps further reduce the costs of insurance. Reinsurance programs are underway in three states, and the first to implement the plan – Alaska – has had significant success. In Alaska in 2017, projected premium rate increases of 42 percent were instead held to just 7.3 percent.

The special twist in HB 1392 is that reinsurance funds will be dispersed in such a way that premiums can be lowered most dramatically in high-cost areas, especially the Eastern Plains, Western Slope and the mountain corridor. We heard testimony in the House Health, Insurance and Environment committee recently about costs that exceeded 20 percent of one middle-class family’s income, or a whopping $25,000 for an individual’s policy, combining premium payments and deductibles. Families and businesses in rural Colorado can’t thrive unless residents above the income cut-off for subsidies have access to health care — whether that’s to provide prenatal care, treat a broken wrist or get access to necessary medications.

Rep. Chris Kennedy and Colorado’s Division of Insurance, under Acting Commissioner Michael Conway, have engaged closely with stakeholders over the past year. Much of that work involved developing a mechanism to create the reinsurance fund, which would combine new fees on individual, group and stop-loss policies, along with a re-purposed portion of the federal funds Coloradans receive through the premium tax credit program.

This is a solid plan that deserves strong support. At the same time, we need to continue efforts to identify providers, facilities and procedures that contribute to the outsize costs that inflate premiums, and to develop mechanisms to rein in outliers and ensure quality, affordable care. Costs matter. But we simply can’t afford to leave Coloradans in those areas out in the cold. Adopting a reinsurance plan now is the right choice.

-By Bethany Pray

Recent articles

2022 Legislative Wrap-Up

This year’s legislative session has been an intense one to say the least, but with many positive results for Coloradans experiencing poverty. Major priority bills required research, testimony and support from CCLP — as well as our partner organizations, and our...

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Mobile homes are some of the last remaining affordable housing. In the face of increasing vulnerability, HB1287 could help protect them.