Colorado’s proposed reinsurance program has been approved by federal officials. The governor’s office says that the program could cut healthcare premiums by an average of 18 percent for state residents enrolled in insurance through the Affordable Care Act.
“It’s the biggest tangible step we’ve seen in reducing costs in the private market,” said Joe Hanel, a spokesman for the nonpartisan Colorado Health Institute.
The reinsurance program would be a state-run fund to assist in covering high-cost health care claims to reduce insurance companies’ costs and drive down premiums. Using this program, the state is going to pay for the most highly-priced health care claims, so private insurers might be able to lower premiums across the board.
However, this reinsurance program applies to only about 250,000 people of the 5.7 million people who live in Colorado. The premium reduction applies to those who buy insurance on the individual market, like those who are unemployed, self-employed or don’t have insurance through their workplace.
“I really do have to pinch myself,” Lt. Gov. Dianne Primavera, who is also the head of the state’s Office of Saving People Money on Healthcare, said at the announcement. “… It means real savings for families.”
According to the state Division of Insurance, a small reinsurance plan would cost the state $70 million in 2019.
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