Colorado will get a major infusion of federal funding, $361 million, for its health insurance programs.
That sum eclipses the $245 million it got last year, according to both the state’s Division of Insurance and the governor’s office.
The money is coming via what’s called pass-through funding, due to the combined savings of the state’s relatively new reform efforts, its reinsurance and Colorado Option programs. Instead of the federal government holding onto savings made by Colorado, they are given back to the state, which says it’ll use the money to try to make health insurance more accessible and affordable.
“Those programs really help lower out-of-pocket costs for folks who are enrolling in private health insurance through Connect for Health Colorado (the state’s health insurance exchange) or folks who were previously left out of financial assistance and are now able to enroll through the OmniSalud program,” a program for undocumented Coloradans to buy health insurance, said Adam Fox, deputy director of the Colorado Consumer Health Initiative.
Still, despite the state reforms, health costs in general remain stubbornly high. Just last month, the health initiative released a survey finding many residents delay or go without health care due to the expense.
“We still have a long way to go to get to a point where health care is really truly affordable for all Coloradans, but the increase in pass-through from last year to this year is significant,” Fox said. He noted the money will help the state to “leverage the programs we've created to start chewing away at those affordability challenges that we face.”
The governor’s office applauded the announcement.
“We appreciate this funding from the Biden-Harris administration, and look forward to this opportunity to pass these savings onto Coloradans,” said Gov. Jared Polis, in a press release.
“We will continue pushing for ways to help all Coloradans access low-cost, reliable, and quality care,” said Lt. Governor Dianne Primavera, who directs the Office of Saving People Money on Health Care.
The state’s insurance commissioner, Michael Conway, says the new funding is proof the programs are working.
The state’s reinsurance program, which lawmakers approved in 2019, pays a portion of the most high-cost insurance claims. That allows carriers to drop the price of individual health plan premiums.
The Colorado Option, signed into law in 2021, is for those who purchase health insurance on the individual market, not through an employer, and for small employers with fewer than 100 employees. Insurers must lower their premiums on Colorado Option plans by 15 percent by 2025, according to the state.
The Colorado Option has its detractors. A group called Colorado’s Health Care Future has called it a “one-size-fits-all” government program that has helped raise costs for patients and their families.
“Its supporters promised it would lower insurance costs for individuals and increase choice in the individual and small-group health insurance markets. Advocates said it would decrease premiums and improve access to health care in every corner of the state. But it has failed on all these fronts,” wrote Sen. Janice Rich, who represents Mesa County and part of Delta County, in an op-ed in Colorado Politics in June.
Other states have created reinsurance programs. They also get pass-through funding from the federal government. But Colorado is the only one with a waiver that joins a pair of health programs that aim to save money, according to the state.
The state’s insurance divisions said pass-through funds will return to the reinsurance program. Some of the money will help pay premiums. Some will go to direct subsidies to reduce out-of-pocket costs, like coinsurance and copays for eligible Connect for Health Colorado consumers, and to fund the OmniSalud program, according to the release.
