DENVER — Gov. Jared Polis announced an 18.2 percent drop in premiums in 2020 for Coloradans who have health insurance through the state exchange.
The change does not impact Coloradans who have insurance through their employers or government.
New: @GovofCO reveals for those on individual market – the cost of health insurance is going down 18.2 percent. This is because of a new reinsurance program passed by #coleg this year #kdvr #copolitics pic.twitter.com/n6rsBDaPAp
— Joe St. George (@JoeStGeorge) July 16, 2019
It is estimated that more than 200,000 Coloradans receive their insurance on the state exchange. Many are on it because they do not receive benefits from their job or they are self-employed.
For the last several years, particularly in rural Colorado, these individuals have traditionally paid the most for insurance.
“For a family of four, it’s very common for that family to actually spend more on health insurance than they do on their mortgage,” said Tamara Drangstveit with Peak Health Alliance.
Help is now expected to soon be on the way courtesy of the state’s new reinsurance program.
Reinsurance is essentially insurance for insurance companies. It allows insurance companies ask the state for a reimbursement in the event a patient — especially one in rural Colorado — receives a large medical bill.
“Reinsurance essentially takes the highest-cost cases — cases with hundreds of thousands of dollars in reimbursements — and prevents those cases from driving up rates for everybody else,” Polis said at a press conference Tuesday.
Polis said the expected 18.2 percent drop is the first major drop in insurance rates for Coloradans on the exchange in history.
So, how did the state create the new program?
It was created earlier this year through legislation at the General Assembly. The reinsurance program has a total cost of $260 million and includes federal and state dollars. Over $90 million comes from Colorado through redirecting current state revenue.
“By bringing down rates, we will make a dent in the number of uninsured,” Polis said.
Colorado’s reinsurance program still needs approval from the Trump administration and the federal government.
“We are hearing incredibly encouraging things from the federal government about our chances on getting the waiver approved,” said Colorado Insurance Commissioner Mike Conway.