DENVER – Federal officials have approved Colorado's proposed reinsurance program, which the governor's office says could slash healthcare premiums by an average of about 18 percent for state residents enrolled in insurance through the Affordable Care Act.
Gov. Jared Polis, who has prioritized lowering health care costs during his first year in office, announced the federal approval at a news conference Wednesday morning.
The reinsurance program would be a state-run fund to help cover high-cost health care claims to reduce insurance companies' expenses and drive down premiums. Under the program, the state would pay for the most expensive health care claims, so private insurers would be able to lower premiums across the board.
The reinsurance program only applies to roughly 250,000 people of the 5.7 million people who live in Colorado. This premium reduction applies to those who buy insurance on the individual market, like those who are self-employed, can't get insurance through their workplace or unemployed. It does not impact the vast majority of Coloradans who have employer-based insurance.
The state Division of Insurance in January estimated that a small reinsurance plan would cost the state $70 million in 2019.
Sen. Kerry Donovan (D-Vail), who co-sponsored the bill that created the reinsurance program, called the program a "creative, Colorado solution that will have a real and immediate impact on people across the state," according to a news release Wednesday.
Donovan's focus with the bill centered on her constituents in the western part of the state and the high country, where insurance premiums are among the highest in the country - in part because there are fewer health care providers and hospitals. The reinsurance program could cut premiums in that region of the state by as much as 29 percent in the individual health insurance marketplace, according to the governor.
The reinsurance program comes on the same day as another health care development supported by Colorado legislators.
The Trump administration on Wednesday took the first steps toward importing cheaper prescription drugs from Canada, a plan supported by Colorado legislators earlier this year. The Department of Health & Human Services introducing a Safe Drug Importation Plan that described how certain drugs from abroad could enter the U.S.