Colorado’s new health exchange will decide this summer whether to assess a fee to insurance companies for each policy they provide exchange users.
The assessment could be up to $1.80 per policy, and if approved by the exchange board would be in effect to help pay exchange operating costs next year and in 2016, according to Connect for Health Colorado CEO Patty Fontneau.
“This will keep fees low and build reserves while our enrollment is growing,” Fontneau said Thursday.
The fee was first reported by Health News Colorado. The fee would raise $13 million for the exchange, according to an exchange document.
The exchange managers sold private health plans to 124,000 people through the end of March as part of the federal Affordable Care Act. Officials told Health News that cancellations and lower-than expected average premiums prompted the proposal.
The General Assembly voted to allow the assessment, if needed, in early 2013 as part of a plan to ensure the exchange would have enough money to operate while getting off the ground, Fontneau said.
The fee replaces a $3.75 assessment that was levied on all medical insurance policies to help support the state’s Cover Colorado plan, a high-risk insurance pool that is being phased out.
Insurers typically pass such fees on to consumers.
State Sen. Kevin Lundberg, R-Berthoud, who sits on the exchange’s oversight committee and opposes the exchange, said the charge falls in a gray area between taxes, which must be voted on by residents, and fees.
“My major concern is with the overall system,” Lundberg said. “I know they are going to have to find some money to run this thing. I don’t think they should have the tax because I don’t believe they should have the exchange.”
The exchange has been using federal money and other grant money to fund the program during its first year, Fontneau said. Legislators “approved our model and recognized there would be a need for the assessment in the second and third year.”
Exchange managers haven’t presented a budget to the board yet, said Dr. Mike Fallon, an exchange board member.
“Until I see a full budget, I wouldn’t be comfortable voting on it. I would always prefer that we run a lean business that is self-sustaining. I prefer not to go to outside funding if possible,” Fallon said.
Tom McGhee: 303-954-1671, tmcghee@denverpost.com or twitter.com/dpmcghee
