Senator Rankin and Senator Donovan, bill sponsors, presented House Bill 19-1168. The bill requires the Commissioner of Insurance in the Department of Regulatory Agencies (DORA) to seek a State Innovation Waiver under the federal Affordable Care Act to create a jointly funded reinsurance program in Colorado. If federal approval is granted, the reinsurance program will apply to 2020 health plans sold on the individual health insurance market. The Commissioner will set the payment parameters of the reinsurance program. These include the attachment point, above which claims are eligible for reinsurance payments; the coinsurance rate; and the reinsurance cap, above which claims are no longer eligible for reinsurance payments. The bill directs the Commissioner to set the parameters of the program so that claims costs are reduced as follows:
- between 30 and 35 percent in geographic rating areas five and nine (Mesa County and western Colorado);
- between 20 and 25 percent in geographic rating areas four, six, seven, and eight (Larimer, Weld, and Pueblo counties, the eastern plains, and southern Colorado); and
- between 15 and 20 percent in geographic rating areas one, two, and three (Boulder, El Paso, and Teller counties, and the Denver metro area).
The reinsurance program is created as a state enterprise that, subject to approval by the legislature and governor, may issue revenue bonds. Revenue to the reinsurance program is exempt from the state's TABOR limit. The Commissioner is authorized to assess special fees against hospitals to finance the state's share of the program. Fees may not exceed $150 million per benefit year and may not exceed a total of $500 million over five years. Hospitals are prohibited from passing the special fee on to consumers in any manner. Procedures will be created to exempt certain hospitals from the special fees based on parameters included in the bill. If the federal government suspends the Health Insurance Provider Fee, created under the Affordable Care Act, the Commissioner must assess a fee of 2.2 percent of premiums collected by carriers or at a rate imposed by the federal government. Hospitals are required to provide quarterly reports to the Commissioner, as outlined in the bill. The Division of Insurance is required to report on the reinsurance program each year as part of the DORA SMART Act hearing. The program is scheduled to repeal on September 1, 2024, following a sunset review.