For nearly two decades, Cover Colorado has been providing health insurance to people in Colorado who don’t have access to group health insurance coverage and have pre-existing conditions the make them uninsurable (or unable to get coverage without exclusion riders or rate increases that put their premium above that offered by Cover Colorado) in the individual health insurance market. While we’re lucky to have such a resource, it doesn’t come cheap.
Last year, the Cover Colorado Task Force issued a report indicating that Cover Colorado’s expenses were projected to increase significantly over the coming decade, and that expenses could exceed available funds by $150,000,000 by 2019. Of course, if health care reform continues forward as currently written, there shouldn’t be a need for high risk health insurance pools as of 2014, because all policies will be guaranteed issue. But there’s a lot of legislative and legal fighting that could go on between now and 2014, so who knows what the health insurance landscape will actually look like three years down the road. If there is still a need for high risk pools going forward, funding will be a long-term issue that has to be addressed.
So where exactly does the funding for Cover Colorado come from? The first page in the Task Force report breaks it down neatly. Roughly 50% of the funding comes from premiums collected from people insured by Cover Colorado, state insurance premiums tax credit allocations, the CoverColorado cash fund, and various gifts and grants. 25% comes from Colorado’s Unclaimed Property Fund, and the final 25% comes from fees assessed through all health insurance carriers regulated by the Colorado Division of Insurance.
The assessment on health insurance carriers is actually collected by the carriers, but it is paid by Colorado residents who are covered by any health insurance policy regulated by the Division of Insurance. Carriers don’t make or lose money on the transaction – they simply collect the fee from their insureds and pass it along to Cover Colorado. For 2011, all Colorado residents who have health insurance provided by a carrier regulated by the Division of Insurance will be paying approximately $3.22/month in Cover Colorado fees. This will raise nearly $35 million for Cover Colorado. The specific amount collected from each carrier can vary somewhat from that amount however, based on the actual number of subscribers each carrier has. For example, Anthem Blue Cross Blue Shield members will see a charge of $3.76/month for Cover Colorado on their 2011 statements, because there are fewer Anthem insureds now than there were on January 1, 2010 when the amount was calculated. This is likely to be the case with most carriers, as the number of uninsured people has increased across the board in the wake of the recession. If you have questions about the Cover Colorado assessment, you can contact the Division of Insurance or Cover Colorado for more details.