Public Comment on Reinsurance Program / 1332 Waiver Request
Your opportunity to comment on the proposed program to address rising health insurance premiums
FINAL - Colorado's 1332 State Innovation Waiver Application for a Reinsurance Program (with final actuarial analysis) - submitted on May 20, 2019 to the Centers for Medicare & Medicaid Services (CMS)
DRAFT - Colorado's Section 1332 Waiver Application Request to the Federal Government - posted April 16, 2019; the public comment period on this draft application was April 16 - May 16, 2019
Public Comment Hearings
- April 22, Monday - 11 a.m. - 1 p.m., Larimer County Fairgrounds and Events Complex (aka The Ranch), Thomas M. McKee Building, Loveland and Fort Collins Rooms, 5280 Arena Circle, Loveland, 80538. Public parking is available (please do not park in the permit parking lot as Larimer County Sheriffs will issue tickets).
- April 29, Monday - 1 p.m. - 3 p.m., in Denver, 1560 Broadway, Conference Room 110D. This meeting will also be available via online participation. If you are attending in person, recognize that parking in downtown Denver can be difficult, so please allow yourself sufficient time.
These were the hearings for members of the public and interested stakeholders to offer their comments on the draft 1332 Waiver Request and the proposed Reinsurance Program.
Submitting Written Comments
Members of the public and interested stakeholders may also submit written comments on the draft 1332 Waiver Request and the proposed Reinsurance Program. Please send an email to DORA_INS_RulesAndRecords@state.co.us with the subject "Written Comments on Reinsurance." The comment period closed on Thursday, May 16, 2019 at 11:59 p.m. (MDT), 30 days after the draft waiver request was posted.
What is the proposed Reinsurance Program? What is the 1332 Waiver Request?
Reinsurance is a program designed to help Coloradans in the individual health insurance market. It would pay a percentage of expensive claims (called the "coinsurance amount") once an individual reaches a certain level (known as the “attachment point”) up to a cap. For example, the program might set the attachment point at $50,000, with a coinsurance amount of 75 percent, with a cap of $500,000. The insurance company would pay the claims up to the attachment point. Once the person’s medical costs (i.e., what is being charged by doctors and hospitals) reached the attachment point of $50,000 in a year, the reinsurance program would pay the coinsurance amount of 75 percent of the costs after that (with the insurance company paying the other 25 percent), up to the cap of $500,000. At that point, the insurance company would again take over the payment of the claims.
Such a program reduces the impact of the high-cost claims on the insurance pool. That, in turn, will reduce Coloradans’ health insurance premiums in the individual market. In addition, the program may also provide an incentive for insurance companies to remain in the Colorado individual market, and possibly expand into areas of the state that currently have fewer companies offering individual plans.
House Bill 19-1168 (HB19-1168), the State Innovation Waiver Reinsurance Program, was passed by the 2019 Colorado Legislature and signed into law by Governor Polis on May 17, 2019. This law establishes the reinsurance program and instructs the Colorado Division of Insurance to submit an application for a 1332 State Innovation Waiver from the federal government for a reinsurance program. The attachment point and cap are not set by the legislation, but directs the Colorado Insurance Commissioner to establish these parameters.
1332 State Innovation Waiver Request
A key element in funding the reinsurance program is what is known as pass-through funding from the federal government. Under the Affordable Care Act (ACA), for people with household incomes under 400 percent (4 times) of the Federal Poverty Level, tax credits from the federal government are available to help make health insurance in the individual market more affordable. These tax credits are tied to health insurance premiums, so that when premiums go up, tax credits go up, and when premiums go down, the tax credits also go down.
As the reinsurance program brings health insurance premiums down, the amount of money the federal government spends on tax credits will also go down. But rather than letting it pocket the money, Colorado will ask the federal government to pass that money through to the state to fund the reinsurance program and maintain the lower premiums and stability it will bring to the individual health insurance market. Section 1332 of the ACA gives states the flexibility to waive certain provisions and receive federal funding to implement state-based health care policies. It is through a request for a 1332 waiver that Colorado will request these pass-through funds.
The Division of Insurance submitted Colorado's waiver request on May 20, 2019.
Seven other states have requested and received a waiver to establish reinsurance programs for their individual health insurance markets.
- HB19-1168 - The State Innovation Waiver Reinsurance Program
- Colorado Reinsurance Program Analysis, Addendum - from the actuarial firm of Lewis & Ellis
- Colorado Reinsurance Program Analysis - from the actuarial firm of Lewis & Ellis
- Commissoner Conway's Presentation on HB19-1168 / Reinsurance Program - from 2/27/19