Earlier this month, Bethany Pray, Interim Executive Director of Colorado Center on Law and Policy, provided the Colorado Department of Health Care Policy and Financing (HCPF) with a public comment regarding mental health parity for Colorado Medicaid. Individuals...
Recent articles
A Summary of Pro-Tenant Bills in the 2023 Legislative Session, Part 1
Protections for renters are important for Colorado. Pro-tenant policies lead to greater housing stability, particularly for our lowest income households. They also can help prevent displacement and the process of gentrification – changing the character of a...
Myths & Facts: Ending Colorado’s Unconstitutional Sponsorship Law
In the mid-90s, President Bill Clinton famously promised to “end welfare as we know it,” by capping the number of years for eligibility and imposing restrictions for certain public benefits. Non-citizens were hit particularly hard as part of that misguided goal as...
Part 2: What is Credit Reporting, and How Does It Harm People with Medical Debt?
Accessing and maintaining good credit is essential to achieving economic mobility. However, a derogatory mark on a credit report can likewise significantly harm one’s life. When an individual struggles to pay off medical debt, the resultant poor credit report can...
Stability fund not a fix for Colorado

A risk pool with plenty of healthy people creates a stable insurance market. Under the Affordable Care Act, the stability of the individual and small-group market depends on the individual mandate bringing those healthy people to the table, and on a set of risk adjustment mechanisms that were hampered after Congressional opponents of the ACA reduced the programs’ funding.
Although the authors of the American Health Care Act of 2017 (AHCA) oppose an individual mandate, they clearly agree with the designers of the ACA that risk adjustment mechanisms will be needed to keep insurance affordable, and have offered the Patient and State Stability Fund as a solution. In fact, such mechanisms may be needed even more under the AHCA because repeal of the mandate to purchase insurance will increase adverse selection, meaning people are more likely to purchase insurance only when sick.
The big question is whether the $100 billion Patient and State Stability Fund has any chance of helping lower premiums, as was forecast by the Congressional Budget Office. As far as Colorado goes, the answer is very likely no, even though the amount targeted for Colorado’s use would ostensibly fall between $100 million and $199 million in 2018. That sounds like a lot of money, but there are two reasons that the Fund won’t function as described in Colorado.
First, the amount of funding targeted for Colorado would be insufficient, even if every dollar given us from the Fund were devoted to reinsurance, a program that helps reimburse carriers for very expensive enrollees. Alaska has a reinsurance program that costs $55 million a year and is widely seen as effective – but with a population seven times the size of Alaska’s, one would expect Colorado to need a reinsurance program with at least $300M in annual funds. A reinsurance program with insufficient funding would be ineffective in stabilizing premium prices, or in keeping carriers from exiting the market.
Second, and what’s worse, Colorado may never be able to access much, if any, of the Fund. Receipt of federal Fund dollars is contingent on the state matching those funds, beginning with at least a 7 percent contribution and ending with a full 50 percent contribution in 2026. Depending on the amount Colorado is eligible for, that means as much as $100 million from the state budget in 2026. The ACA, in contrast, required issuers — rather than states — to contribute to the risk adjustment funds. In the event Colorado is unable to overcome TABOR restrictions to locate funding, the state might receive nothing at all from the Patient and State Stability Fund.
Recent articles
CCLP’s Public Comment on Mental Health Parity for Colorado Medicaid
Earlier this month, Bethany Pray, Interim Executive Director of Colorado Center on Law and Policy, provided the Colorado Department of Health Care Policy and Financing (HCPF) with a public comment regarding mental health parity for Colorado Medicaid. Individuals...
A Summary of Pro-Tenant Bills in the 2023 Legislative Session, Part 1
Protections for renters are important for Colorado. Pro-tenant policies lead to greater housing stability, particularly for our lowest income households. They also can help prevent displacement and the process of gentrification – changing the character of a...
Myths & Facts: Ending Colorado’s Unconstitutional Sponsorship Law
In the mid-90s, President Bill Clinton famously promised to “end welfare as we know it,” by capping the number of years for eligibility and imposing restrictions for certain public benefits. Non-citizens were hit particularly hard as part of that misguided goal as...
Part 2: What is Credit Reporting, and How Does It Harm People with Medical Debt?
Accessing and maintaining good credit is essential to achieving economic mobility. However, a derogatory mark on a credit report can likewise significantly harm one’s life. When an individual struggles to pay off medical debt, the resultant poor credit report can...