$140+ million in federal funds will help Colorado make health insurance more affordable under new public option waiver
On June 23, the Centers for Medicare and Medicaid Services (CMS) approved Colorado’s Section 1332 Waiver request to create the Colorado Option, the state’s standardized health insurance plan for individual and small group markets. The approval of Colorado’s 1332 waiver grants permission for the state to fully implement the public health insurance option, while also allowing for an influx of federal funds to help Colorado expand health care coverage.
The 1332 waiver is estimated to produce net federal savings of $214 million in 2023 and $1.618 billion over the five-year waiver period. This pass-through funding will cover nearly the full state costs of the reinsurance program and its state-based subsidy programs. This means that all the fees raised through the Health Insurance Affordability Enterprise will be spent on expanding health care coverage to those left out of health care reform – including undocumented Coloradans and children and families stuck in the “family glitch.” This is estimated to amount to over $140 million going toward health care coverage expansion in Colorado. This will play a huge role in achieving health equity in Colorado, allowing the state to leverage funds to expand the affordability and accessibility of health care coverage to Colorado families, regardless of their immigration and socioeconomic status.
Colorado Option was established through HB21-1232, which the Children’s Campaign supported. This law required the Commissioner of Insurance to develop a standardized health insurance plan that provides predictable coverage for certain high value services including primary care, diabetes care, mental and behavioral health, and substance use treatment. The law also improves coverage for perinatal health services, and is offered through Colorado’s health insurance exchange. Approval of the 1332 waiver allows for increased federal savings due to the required premium reductions of up to 15% after three years, after which these savings are put into the Health Insurance Affordability Enterprise. The Enterprise also includes a health insurance affordability fee on hospitals and health insurers to fund measures that reduce the costs of individual health insurance plans.
This amazing news needs to be shared across the state so that Coloradans who have long been left out of equitable access to health care coverage are aware of the benefits that they will soon be able to access. The Colorado Consumer Health Initiative has provided some outreach materials for consumers across Colorado to use to get the word out to their community members.
Resources for further learning:
- Colorado: State Innovation Waiver | CMS
- Colorado Option | DORA Division of Insurance
- Health Insurance Affordability Enterprise | DORA Division of Insurance (colorado.gov)
