Now that the program is approved (https://www.cpr.org/2019/07/31/polis-celebrates-colorados-new-reinsurance-program-which-could-lower-premiums-in-the-future/) for the 2020 and 2021 plan years, here are a few things to keep in mind:
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The program impacts individual insurance plans sold on the Colorado marketplace, where about 8% of Coloradans receive their health insurance
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In an effort to reduce premiums, the program uses a pool of state and federal funds to help pay for some of the most expensive medical consumers in the individual market
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Some of Colorado’s portion of the funds will come from hospital fees paid to the state and general state revenues (https://www.healthaffairs.org/do/10.1377/hblog20190802.811138/full/)
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Premiums in the individual market are expected to drop 18% statewide on average, with potentially higher savings seen in the Western Slope (https://www.denverpost.com/2019/07/31/colorado-gets-federal-reinsurance-waiver/)
Colorado joins eleven other states which now have similar programs on the books and is one of 5 states to be approved this year. Programs that also received approval this summer are in Delaware, Montana North Dakota, and Rhode Island (https://www.kff.org/health-reform/fact-sheet/tracking-section-1332-state-innovation-waivers/).
Fall River will continue to keep an eye on how the reinsurance program impacts the individual insurance marketplace as 2020 rates are released. Feel free to reach out to us if you’d like more information!
