Fund to help cover sickest patients may cut premiums

A bill that would create a state fund to help insurers cover their sickest and most expensive patients could reduce individual health insurance premiums in Colorado by almost 23 percent, the state Division of Insurance said Thursday.

Colorado legislators are considering legislation to create a state reinsurance program, which, if passed, would help insurance companies cover costs once a patient reaches a set amount of health care claims.

The Division of Insurance had an actuarial firm, Lewis & Ellis, review the proposed program, which would affect health insurance bought on the individual market.

“This study shows that our innovative Colorado Reinsurance funding model works,” said Michael Conway, state insurance commissioner, in a statement.

“It also disproves the argument that people with commercial health insurance have to pay more to make up for what Medicare and Medicaid pay.”

In introducing the bill, legislators said monthly insurance premiums could be cut 10 percent to 35 percent by the start of the next open enrollment period later this year.

“The initial review of this report makes us very hopeful that our approach to funding reinsurance will work,” said the bill sponsors in a statement.

The sponsors include Sens. Kerry Donovan, DVail; Bob Rankin, R-Carbondale; and Reps. Julie McCluskie, D-Dillion; and Janice Rich, R-Grand Junction.

Under the program, hospitals would be paid at a lower rate through the program, which has drawn concern from the Colorado Hospital Association.

The program would reduce the amount hospitals and other providers are paid by having the commissioner of insurance create a list of set prices for health services.