DENVER — Gov. Jared Polis announced Wednesday that the federal government has approved a reinsurance plan designed to lower premiums for individuals buying insurance on the Colorado health care exchange.
The Democrat already had released projections showing that premiums next year for 400,000 Coloradans — about 8% of those buying insurance on the exchange — will drop by more than 18% with a reinsurance plan in place.
The program starts for 2020 coverage plans.
Under it, the state covers the most expensive medical claims, allowing private insurers to lower rates across the board for individuals participating in the individual Connect for Health Colorado market created under former President Barack Obama’s health care law.
An area of western Colorado is home to some of the nation’s highest health insurance rates.
State Sen. Bob Rankin and Rep. Janice Rich, both Republicans, and Democratic state Sen. Kerry Donovan and Rep. Julie McCluskie sponsored legislation this year to create the program
“This has been a years-in-the-making goal,” Donovan said.
Polis, Donovan and McCluskie held a Capitol news conference to formally announce the decision.
“Bringing down the outrageous cost of health care in our state has been a top priority for my administration,” he said in a statement. “Finally, we’re driving insurance premiums down.”
Federal approval is needed because roughly two-thirds of the reinsurance program will be paid for with federal funds currently used for tax subsidies for patients purchasing insurance under the Affordable Care Act.
In 2020, Colorado’s program will use $163 million in federal funds and $87 million in state funds.
Alaska, Maine, Maryland, Minnesota, New Jersey, Oregon and Wisconsin have federally-approved reinsurance programs, according to the Kaiser Family Foundation.
Fourteen of Colorado’s 64 counties currently have just one insurer on the exchange, and individual monthly premiums for residents of those counties can be $500 more than in metropolitan Denver.