Reinsurance bill advances in Colorado Legislature

April 08-- Apr. 8--If you are a working individual, paying for your own health insurance, House Bill 1168 is supposed to help lower your insurance premiums as much as 35 percent.

House lawmakers -- both majority Democrats and some Republicans -- approved the bill on a 47-15 vote Monday, sending it over to the Senate for likely approval as well.

It's one of the bills Gov. Jared Polis has spotlighted as important health care reform this year because it creates a state-run "reinsurance fund" to help insurance companies pay for the most expensive medical cases they face, which is a major contributor to high premiums.

The bill divides the state into three groups. Currently, the highest insurance costs are being paid on the Western Slope and state analysts have said a reinsurance program could lower those premiums as much as 35 percent.

Across Southern Colorado, the savings goal is up to 25 percent.

In the first group, around the Denver area, the hoped-for savings would be 15-20 percent.

According to the bill crafted in the House, the reinsurance fund would be paid for by fees on many hospitals in the state, as well as federal money.

Also, the program will be limited to those people who are paying their own insurance costs and not getting coverage from an employer. That amounts to about 8 percent of workers in Colorado, but they face the highest health-insurance costs.

"This will have a meaningful reduction in health insurance rates on the individual market across the state," bill sponsor Rep. Julie McCluskie, D-Dillon, said Monday.

The biggest sticking point has been hitting hospitals with a fee to cover the reinsurance fund. Smaller and rural hospitals in particular opposed the bill, protesting it would jeopardize their ability to stay in business.

A spokesman for the Colorado Hospital Association said an amendment was agreed to last Friday that will exempt those hospitals from the reinsurance fee. Also likely to be exempt are major hospitals where a majority of their patients are on Medicaid or Medicare insurance.

"We were able to change our position from opposing the bill to being neutral," the spokesman said.

Colorado would have to get a federal waiver to create the reinsurance plan, but eight other states already have similar programs.

As currently written, the state's Division of Insurance will draw up the details of the program, such as how costly a medical case has to be before the reinsurance fund takes over paying for it.

For example, the state could set that line at $50,000 with the reinsurance fund stepping in to cover any costs above that.

Those details would be determined by the insurance division in time to have the program available next year.

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