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Reinsurance Program Saving Coloradans Money on Health Coverage

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DUE TO THE REINSURANCE PROGRAM

Eric Galatas/ Colorado News Connection

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The days of exponentially high increases in health-insurance costs may finally be in the rearview mirror. The Colorado Division of Insurance’s preliminary plans for 2022 project only slight premium increases. Gov. Jared Polis credited the state’s reinsurance program for helping save consumers money.

Adam Fox, deputy director of the Colorado Consumer Initiative, said the program, which allows insurance companies to defray the costs of the most expensive claims, has helped keep rates stable in the individual market.”On average, Coloradans are going to see around a 1.4 per cent increase in plan premiums, which is a far cry from some of the double-digit premium increases that we saw several years ago,” Fox explained.

Western Slope, Eastern Plains and Front Range

Savings from the reinsurance program increased this year. Grand Junction and other parts of the Western Slope, and communities on the Eastern Plains, saw health-insurance premiums drop by more than 35 per cent on average. Rates in Front Range cities dropped between 20 per cent and 30 per cent. Critics of legislation establishing the program worried the cost of fees collected to finance reinsurance would just be passed along to consumers.

Fox noted so far, there has been little evidence consumers are being negatively impacted by how the program is funded. Even if fees collected from insurance companies were being passed along to consumers, Fox added the program’s benefits are far greater. “On average, Coloradans are saving 24 per cent on their premiums because of the reinsurance program, and the fee is 2 per cent of premiums being collected,” Fox outlined.

What is the reinsurance program?

The reinsurance program is one of a host of policy tweaks state lawmakers have crafted under the Affordable Care Act in an effort to keep costs down and increase coverage. Polis promised even greater savings when the Colorado Option comes online. The measure requires insurers, health-care providers and hospitals to reduce premiums by an additional 15 per cent by 2023.