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Insurance premiums may fall 30% for state health exchange customers

Savings will depend on approval of federal funding
This week the state Division of Insurance released estimates of the savings customers of Connect for Health Colorado, the state health exchange, could see next year.

Residents in Southwest Colorado purchasing insurance from the state health care exchange next year could see the cost of their premiums fall an average of 30%.

The state Division of Insurance announced Tuesday insurance companies have proposed cheaper insurance premiums through the state health exchange, Connect for Health Colorado, for the first time. However, the lower costs are contingent on federal funding that has not yet been approved.

In La Plata County, about 3,000 people purchased insurance for 2019 on the exchange set up by the Affordable Care Act. In Montezuma County, about 800 customers purchased insurance through the exchange.

The exchange serves people who are not insured by their employer or government-run programs, such as Medicaid or Medicare.

The savings for consumers could be achieved through a new reinsurance program that was a priority for Gov. Jared Polis’ administration and passed the Colorado Legislature at the end of this year’s session.

“Reducing health care costs for Colorado families has been a primary focus of my administration, and today, we are seeing the first signs that our hard work is paying off,” Polis said in a statement.

The reinsurance program is expected to provide funding for insurance companies to cover particularly high-cost insurance claims between $30,000 and $400,000, said Joe Hanel, a spokesman for Colorado Health Institute. The fund lowers financial risk for insurance companies that operate on the exchange and allows them to lower premiums.

Southwest Colorado could see more savings than other parts of the state because insurance companies will be able to request the reinsurance program pay a higher percentage of high-cost claims for customers on the Western Slope than in other parts of the state, he said.

Southwest Colorado residents pay some of the highest premiums for insurance through the health exchange, and this program could save those residents thousands of dollars, particularly if they do not qualify for tax credits, Hanel said.

The state funding for the program is in place. However, the reinsurance program has yet to receive $170 million from the federal government to operate, said Vincent Plymell, a spokesman for the Division of Insurance.

The federal funding would otherwise be spent on tax credits to offset high premiums, Hanel said.

If the funding is not approved, Southwest Colorado premiums would fall an average of about 1.2%, according to the Division of Insurance.

Durangoan Jan Phillips was among those spending thousands on health insurance premiums through the health exchange last year, and she is pleased by proposed savings for residents relying on the exchange.

“They need a reprieve from horrendously high premiums,” she said.

However, she is critical of reinsurance because it relies on taxpayer dollars to subsidize for-profit insurance companies, said Phillips, a member of Healthcare Durango, a nonpartisan group.

But ultimately, Phillips said she would like to see Medicare for All implemented across the country to provide expanded affordable health insurance coverage.

mshinn@durangoherald.com

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