Reinsurance works by paying a portion of high-cost claims, allowing insurance companies to lower the premiums for individual health insurance plans. Consumers who purchase individual health insurance plans receive these premium reductions automatically - they do not need to sign up for the reinsurance program to get its benefits. As the reinsurance program brings health insurance premiums down, the amount of money the federal government spends on Affordable Care Act (ACA) tax credits also goes down. But rather than letting the federal government pocket the money, the federal government passes that money through to the state to fund the reinsurance program and maintain lower premiums and market stability.
Colorado's reinsurance program was extended through 2026 by SB 20-215 and a federal 1332 waiver extension from the Centers for Medicare and Medicaid Services (CMS). See "CMS 1332 Waiver Extension" section below for more information.
Colorado Reinsurance Program
Annual Reinsurance Public Forum: The annual Reinsurance Public Forum, hosted by the Colorado Division of Insurance, was held on September 8, 2021. This forum was open to all stakeholders and members of the public. The meeting included an overview of Colorado’s State Innovation Waiver Reinsurance Program and the state’s Affordable Care Act Section 1332 waiver, as well as a public comment period.
Reinsurance SMART Act Report Delivered to Colorado Legislature - Oct. 28, 2020
Reinsurance Payment Parameters for 2021 Benefit Year - Revised June 2, 2020
B-4.109 Collection of Reinsurance Program Data from Carriers and Hospitals - issued April 30, 2020
HB19-1168 and 1332 State Innovation Waiver Application
Draft Reinsurance Program Timeline
- October 1, 2019: Permanent regulation containing the payment parameters for the 2020 plan year will become effective.
- Late November 2019: The Division expects to issue draft regulations for reinsurance implementation
- Early December 2019: Stakeholder meetings for draft regulations
- Late December 2019: Regulations finalized
- January 1, 2020: Division submits payment schedule to CMS
- January 2020: First provider payments collected (monthly thereafter)
- February 28th, 2020: Division submits first quarterly report
- March 15, 2020: Payment parameters for the 2021 plan year will be established by the Commissioner via rule.
- April 2020: The federal pass-through money is provided to the Division
HB19-1168, The State Innovation Waiver Reinsurance Program was passed by the Colorado Legislature in 2019 and signed into law by Governor Polis on May 17, 2019. In addition to establishing a two-year reinsurance program for 2020 and 2021, the law requires the Division to submit an application to the Federal Government for a 1332 State Innovation Waiver for a reinsurance program.
Colorado's 1332 State Innovation Waiver Application for a Reinsurance Program (includes final actuarial analysis) - submitted on May 20, 2019 to the Centers for Medicare & Medicaid Services (CMS)
- July 29, 2019 - Actuarial Analysis Addendum: Risk Adjustment and Reinsurance Interaction - from actuarial firm of Lewis & Ellis, Inc.
- July 15, 2019 - No dampening factor needed in 2020 for interaction between Federal Risk Adjustment and State Reinsurance - from actuarial firm of Lewis & Ellis, Inc.
June 5, 2019 Letter from CMS: Preliminary determination that Colorado application is complete - This marks the beginning of 180-day full review of the application, and the 30-day Federal public notice and comment period (comment period will end on July 5, 2019).
Public Meetings and Preliminary Actuarial Analysis:
- Public Meetings on Reinsurance Program and Draft 1332 Waiver Request
- Colorado Reinsurance Program Actuarial Analysis, from actuarial firm of Lewis & Ellis - March 2019
- Addendum to Colorado Reinsurance Program Actuarial Analysis - Program Costs without Reference-Based Pricing - March 2019
- Revised Scenarios for Reinsurance Program - April 26, 2019
- Commissioner Conway's Presentation on HB19-1168 and the Reinsurance Program - Feb. 27, 2019, House Health and Insurance Committee Hearing
SB17-300 - High-Risk Health Care Coverage Program
In 2017, the Colorado Legislature passed SB17-300, which directed the Division of Insurance to "explore the feasibility of maintaining healthcare coverage for high-risk individuals and reducing premiums through a reinsurance program or other high-risk programs." The information below contains the actuarial studies and reports that were the outcome of that bill, as well as information and materials from the numerous stakeholder meetings that were convened on this topic throughout 2017.
Actuarial Studies / Reports:
- Milliman Inc. Final Actuarial Report to the Colorado High-Risk Health Care Coverage Task Force - Nov. 11, 2017
- Milliman Inc. Summary / Appendix of Final Actuarial Report - Jan. 4, 2018
- Milliman Inc. Addendum to Final Actuarial Report - Jan. 4, 2018
- Division of Insurance Preliminary Report Regarding SB17-300 Colorado High-Risk Health Coverage Study - Oct. 2, 2017
- Milliman Inc. Preliminary Findings - Actuarial Report to the Colorado High-Risk Health Care Coverage Task Force - Sept. 27, 2017
- High-Risk Reinsurance Proposal Summary / Fact Sheet - Jan. 5, 2018
SB17-300 Stakeholder Meetings and Materials