Back in August, the Colorado Health Benefits Exchange got permission from a special committee to submit an application for a $43 million federal grant to help the Exchange get its infrastructure up and running on schedule. And now Colorado’s Exchange has been awarded the grant. According to HHS, the money will be used to “continue efforts to establish the services and systems to launch Colorado’s new health insurance exchange.” This influx of money comes on the heels of another federal grant of almost $18 million that was awarded in February. The money will certainly help the exchange get established, but the large sums of grant money necessary to get things rolling have made some lawmakers worry that the exchange will not be able to cover its own expenses by the 2015 deadline for doing so.
Throughout the entire healthcare reform process, Colorado has been one of the states working hardest to make healthcare for everyone a priority. Even before healthcare reform became a national issue, the Colorado Blue Ribbon Commission was actively working on the problem (and many of the recommendations that the Blue Ribbon Commission recommended ended up being quite similar to reforms that subsequently were included in the PPACA). So it’s not surprising that the Colorado health insurance exchange is moving ahead on schedule to meet the target of being able to start enrolling people and small businesses in the exchange as of October 2013 (January 2014 will be the first available effective date). What remains to be seen is whether the exchange will be able to deliver on its promise of lower-cost health insurance policies. We do know that the exchange will be a place for people to receive their federal health insurance premium subsidy if they qualify based on income, and for many families that will definitely help to offset the cost of their health insurance. We also know that there will be more uniformity in the exchange than there is now in the small group and individual markets. The essential benefits requirements that will take effect in 2014, together with the “metal” ratings (bronze, silver, gold, platinum) for plan Actuarial Values will help to make it easier to compare policies and know that all of the options available offer at least decent coverage.
But there are a lot of expectations that policies will be less expensive in the exchange, and I’m curious to see if that ends up being the case or not. Senator Michael Bennet hailed the grant award and said that “Hundreds of thousands of Coloradans who now don’t have insurance or who have insurance in the unstable, high-cost individual market will have a range of more affordable options through the new exchange.” It will be great if the exchange results in far more Colorado residents with health insurance to offset the risk of catastrophic medical bills. The federal premium subsidies that will be provided via the exchange should definitely help with that. But as to whether or not the actual premiums charged (which will have to be paid in full by any individual who doesn’t qualify for the federal subsidies) will be significantly lower, I think it might still be too early to know.
