The bill establishes the health insurance affordability enterprise, for purposes of section 20 of article X of the state constitution, that is authorized to assess a health insurance affordability fee (insurer fee) on certain health insurers and a special assessment (hospital assessment) on hospitals in order to:
- Provide business services to carriers that pay the fee, including services to increase enrollment in health benefit plans offered by carriers across the state; increasing the number of individuals who are able to purchase health benefit plans in the individual market by providing financial support for certain qualifying individuals; funding the reinsurance program that offsets the costs carriers would otherwise pay for covering consumers with high medical costs; improving the stability of the market throughout the state by providing consistent private health care coverage and reducing the movement of individuals
between group and individual coverage andfrom insured to uninsured status; andreducing provider cost shifting from the individual market and the uninsured to the group market; and creating a healthier risk pool for all carriers by establishing a path for consistent coverage for individuals; and
- Provide business services to hospitals, including
increasing hospital revenuesby reducing the amount of uncompensated care provided by hospitals; andreducing the need of providers to shift costs of providing uncompensated care to other payers ; and expanding access to high-quality, affordable health care for low-income and uninsured residents .
The enterprise is to start assessing and collecting the insurer fee in 2021, which fee is based on a percentage of premiums collected by health insurers in the previous calendar year on health benefit plans issued in the state. The hospital assessment is a specified amount assessed and collected in the 2022 and 2023 calendar years. Money collected from the insurer fee and hospital assessment is to be deposited in the health insurance affordability cash fund (fund), which the bill creates. The bill also transfers an amount of premium taxes collected by the state in 2020 or later years that exceeds the amount collected in 2019, but not more than 10% of the enterprise's revenues, to the fund.
The enterprise is required to use the insurer fee, the hospital assessment, and any premium tax revenues or other money available in the fund, in accordance with the allocation specified in the bill, for the following purposes:
- To provide funding for the reinsurance program established by House Bill 19-1168;
- To provide payments to carriers to increase the affordability of health insurance on the individual market for Coloradans who receive the premium tax credit available under federal law;
- To provide subsidies for state-subsidized individual health coverage plans purchased by qualified low-income individuals who are not eligible for the premium tax credit or public assistance health care programs;
- To pay the actual administrative costs of the enterprise and the division of insurance for implementing and administering the bill, limited to 3% of the enterprise's revenues; and
- To pay the costs for consumer enrollment, outreach, and education activities regarding health care coverage.
The enterprise is governed by a 9-member board composed of the executive director of the Colorado health benefit exchange and the commissioner of insurance or their designees and 7 members appointed by the governor and representing various aspect of the health care industry and health care consumers.
With regard to the reinsurance program and enterprise established pursuant to House Bill 19-1168, the bill:
- Incorporates the reinsurance program enterprise within the health insurance affordability enterprise;
- Eliminates funding for the reinsurance program from special assessments on hospitals and health insurers, excess premium tax revenues, and specified transfers from the state general fund and instead allocates a portion of the health insurance affordability enterprise revenues to the reinsurance program annually; and
- Extends the reinsurance program, subject to federal approval of a new or extended state innovation waiver to enable the state to operate the reinsurance program and access federal funding for the program.
(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)