Federal government approved waiver for reinsurance effort projected to have major cost savings for health consumers

(July 31) – Legislative sponsors and Governor Polis announced today that the bipartisan reinsurance program has been approved for a federal 1332 waiver, which means the program can proceed and achieve real savings in health care costs for consumers across the state, particularly in rural areas.

Projections announced earlier this month estimated an 18.2 percent decrease in premiums for individual plans on average across the state, and even greater savings of up to a whopping 33.5 percent for high-cost areas such as the Western Slope.

“I am thrilled that the reinsurance program will move forward and that my Western Slope constituents and Coloradans across the state will see real, substantial reductions in their health care costs,” said Rep. Julie McCluskie, D-Dillon. “I hear almost every day in my community that the cost of health care is the single greatest challenge to staying in the high country. Every Coloradan deserves access to high-quality, affordable health care services in the communities where they live – and this program is a key part of our plan to achieve that goal.”

Coloradans on the individual market are struggling to keep up with the out-of-control costs of health care, particularly in rural and mountain areas of the state. By establishing a reinsurance program Colorado can stabilize the individual marketplace, increase health insurance participation and share the risks more broadly.

Rising health care costs are driven in part by the underlying cost of care but are exacerbated by an insurance market that assigns the highest risks and highest costs to the individual market. This is particularly the case on the Western Slope and in rural Colorado, causing families and individuals to forgo health insurance coverage, putting them at major risk of medical debt if emergencies arise.

Rep. McCluskie introduced the bipartisan bill in the House with Rep. Janice Rich, R-Grand Junction. Sen. Kerry Donovan, D-Vail, and Sen. Bob Rankin, R-Carbondale, are the Senate sponsors.

This bipartisan law aims to reduce insurance premiums for individuals and families by January 2020 to provide much-needed relief to Coloradans, many of whom are paying up to a third of their income on monthly premiums. Our state, especially the Western Slope, has some of the highest health insurance costs in the country.

The law establishes three tiers, from the highest cost areas of the state to the lowest cost areas, in order to pass savings on to Coloradans. The first tier, consisting of regions in the state with the highest costs, will experience the greatest reduction in premiums, by 30 to 35 percent. The second tier will experience reductions in premiums by 20 to 25 percent. Finally, the third tier, regions with the lowest costs, will experience reductions in premiums by 15 to 20 percent.

HB19-1168 passed both the House and the Senate with broad bipartisan support and was signed into law by the Governor in May of this year. 

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