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Health Care Exchanges in Colorado Face Financial Crisis

by Vanessa Jones on May 5, 2014 at 4:00 PM
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 Health Care Exchanges in Colorado Face Financial Crisis

Connect for Health Colorado, USA, has spent about a $100 million from federal funds and is now trying to figure out how to sustain itself beyond a year.

The board members and many legislators are against increasing the fees. The health plans are not compliant with The Affordable Care Act which will bring down the number of enrollments through the exchange. The exchange is a nonprofit public entity to help people find private insurance under the ACA and apply for government subsidies if they qualify. It has been funded mostly by federal grants but will rely more on fees in the future.


"We work very hard to keep spending as low as possible and do everything we can to bring in more people" into the exchange, said Connect for Health Colorado chief financial officer Cammie Blais. In March, the board rejected a plan to raise the user fee to 1.7 percent, "It's a tax," said Dr. Mike Fallon, a board member who sits on the exchange finance committee, about the broad assessment. "Anything we can do to eliminate that or keep it as low as possible is best." Sen. Owen Hill, a Colorado Springs Republican who sits on the Senate finance and health and human services committees, also opposes any fee increases.

"It undermines private insurance, and every single person will pay this fee whether their policy is on the exchange or not," Hill said. "My understanding is that a fee on carriers is different from a tax, which would be something paid by everyone," Blais said, adding the Cover Colorado fee was triple what is in her model.

Ben Price, executive director of the Colorado Association of Health Plans, said insurance companies supported the legislation that put in place the exchange fees, so they generally support the model. "I don't think there's too much heartburn about it," he said. "There's a bit of a comfort level that they could have asked for more and didn't and it might be less. The benefits (of health insurance reform) outweigh the costs."

Enrollment so far is meeting the exchange's mid-range projections. The exchange is also considering moving into selling other types of insurance, like vision coverage and life, though its current technology is not set up for that.

The exchange has already overspent its current-year budget, $47 million of the $116 million staff budgeted from the beginning of June 2013 through 2014. The budget showed that the exchange spent $100 million in federal funding. No federal money was expected to come to the exchange, though the budget is expected to fall from $70 million this year to $41 million in 2015 and then to $26 million in the last two years of the model. Fallon hopes the exchange can live within its means and look for cuts instead of increasing fees — though he concedes his view is a minority on the board.

"If we can attract a large enough customer base, we might not have to increase revenue," he said.


Arthur Kane, May 2014

Hannah Punitha (IRDA Licence Number: 2710062)

Source: Medindia

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