Senators present revised Colorado reinsurance bill

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DENVER (AP) – Two state senators whose rural member states are paying some of the highest health insurance rates in the country on Thursday pleaded for support for a law to lower those premiums by helping state-owned insurers with the highest-risk customers.

However, the reinsurance bill, sponsored by Republican Senator Bob Rankin of Carbondale and Democratic Senator Kerry Donovan of Vail, was drastically changed after proponents had stated that a previous plan to pay for the sovereign wealth fund ignored existing hospital obligations to the state that could cost the state dearly under federal regulations.


The Senators made last-minute amendments that required reduced hospital fees, insurance premiums and other pending legislation to provide a two-year reinsurance program from 2020 onwards. The original law was based on a five-year program.


The hope, according to the sponsors, is to launch a program that is urgently needed in the rural Colorado so that the legislature can find a new financing.

The Senate Health & Human Services Committee sent the amended draft 4-1 votes to the Finance Committee. The three Democrats of the Jury voted in favor, as did GOP Sen. Larry Crowder, who pointed out that his district in the south of Colorado also includes residents who have difficulty paying their medical bills.

The reinsurance bill is facing tough opposition at the meeting scheduled for 3 May. If she passes the Senate, she has to run through the Democratic Party-run house to reach Governor Jared Polis. The housing bill must also be changed and passed.

Reinsurance, which has been successfully introduced in other countries, has the highest priority for the Democratic Governor – and for legislators like Rankin.

"Our voters have been suffering for years," said Rankin. "We know the program is effective, it has always been a question of how to pay for it."

The initiative would allow the state to cover some of the most expensive medical bills caused to patients in the Colorado single market, or about 250,000 people who buy health insurance directly from insurers.

This would allow private insurers to lower market premiums. The sponsors originally aimed for an immediate reduction in individual contributions of 35% to 40% in rural Colorado and 15% in Denver.

The revised law foresees a 20% reduction in rural areas and 5% to 10% in other areas, Rankin and Donovan said. Higher reductions would be accompanied by a restructured long-term financing mechanism, they said.


When the bill enters into force, the state must obtain federal approval to implement the program. This is because a significant portion of it is being paid in federal funds that are currently being used to provide tax relief to patients who take out insurance under the Affordable Care Act.

Insurance Commissioner Michael Conway said that people who do not receive government grants for their insurance can cut interest rates as early as next January. "These people are really scared," he said of local residents who were forced to choose between expensive, high-deductible health plans and paying their mortgages or other needs.

Smallwood was skeptical of the last-minute funding proposal and rejected Denver residents sacrificing affordable housing finance for what they had termed minimal premiums in rural areas.

"My hope is that we'll scrap this," he said, arguing with regard to a plan that was not rushed in the final days of the session.

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