Colorado Reinsurance Program Extended by CMS

1332 Waiver Approved to Continue Program Through 2026

The Centers for Medicare and Medicaid Services (CMS), on behalf of the federal Department of Health and Human Services (HHS) and the U.S. Department of the Treasury, has announced it has approved Colorado’s 1332 State Innovation Waiver to continue the reinsurance program for 2022 – 2026.

The Colorado Division of Insurance (DOI) recently announced the preliminary individual plans and premiums information for 2022. Initial reviews of what the insurance companies submitted to the Division showed that the reinsurance program is expected to save Coloradans 24.1% on their premiums. The DOI will continue to review the filings throughout the summer and into the fall. Final, approved plans and premiums for 2022 should be released in mid-October.

As Colorado builds back better from this pandemic, we continue to be focused on saving people money on health care and delivering real results. Secretary Becerra and CMS Administrator Brooks-LaSure’s approval of the bipartisan reinsurance program will allow more Coloradans to save money on health care and put it towards groceries, a vacation, and everyday needs,” said Governor Jared Polis. “We are thrilled to have a strong relationship at the federal level who understands the importance of collaboration and Colorado.”

Governor Polis and cabinet members met with HHS Secretary Xavier Becerra this summer. This is the first 1332 waiver approved under the Biden-Harris Administration and the first approved by the new head of CMS, Chiquita Brooks-LaSure.

“The future of health care lies in expanding access to health coverage and accelerating innovative solutions that can advance high-quality affordable care,” said HHS Secretary Xavier Becerra. “The Affordable Care Act (ACA) gives states tools to do this, and Colorado’s extension of its waiver program delivers lower costs all while retaining comprehensive consumer protections afforded under the ACA. We look forward to continuing to work with states to explore more innovative approaches nationwide as we aim to build back better.”

“Our partnerships with states are essential to building on the ACA. Plan participation has increased in Colorado, and the program continues to reduce premiums in areas where consumers historically have the highest costs—particularly in rural communities,” said CMS Administrator Brooks-LaSure. “By extending Colorado’s waiver, CMS is acting to make sure the state can continue to innovate on solutions that work best for its residents. The Biden-Harris Administration will continue to partner with states to protect the health of Americans across the country. Together, we will work to expand on our efforts so all Americans can find the peace of mind that comes with health coverage.”

Colorado’s reinsurance program reduces premiums and increases the affordability of health insurance in Colorado’s individual health insurance market. In its first year, 2020, the program saved people 20% on their health insurance, indicating premiums would have been 20% higher without the program.

In 2021, the reinsurance program saved Coloradans nearly 21%. Based on preliminary reviews of information for 2022, it is projected to save Coloradans 24% on their individual insurance.

The reinsurance program, which spreads risk across the Colorado health insurance market, helps reduce the impact of high-cost claims. The program thereby lowers premiums for individuals and makes it easier for people to afford coverage.

“The Governor and I have heard from individuals and families all across the state about the cost of health care taking too much of their budgets,” said Lieutenant Governor Diane Primavera. “It is solutions like the reinsurance program—a bi-partisan legislative effort involving work at the Federal and State levels, targeting our highest cost areas—that will bring meaningful relief to the people of Colorado. I am excited and proud that Administrator Brooks-LaSure approved our application.”

The program reimburses at different levels in different parts of the state with a three-tiered structure designed to provide more assistance to the rural and mountain areas that have higher health care costs and higher health insurance premiums than other areas.

“I could not be prouder of the team at the Division that made this extension happen so that we can continue our commitment to help people throughout the State afford access to health care. The reinsurance program has been a key component in making individual health insurance more affordable in Colorado, and now we have the approval to continue it for five more years,” said Colorado Insurance Commissioner Michael Conway. “And with the Colorado Option coming online starting in 2023, we will continue to help people find affordable, high-quality health insurance.”

Section 1332 of the ACA allows states to propose innovative ways to provide their residents high-quality, affordable health insurance that includes the basic protections of the ACA. This 1332 waiver gives Colorado the ability to fund a substantial amount of the reinsurance program with federal funds—dollars that would not have otherwise come to the State.

The DOI, part of the Department of Regulatory Agencies (DORA), submitted the waiver application on April 30, 2021. Senate Bill 20-215 authorized the DOI to apply for the waiver. Aside from extending the reinsurance program an additional five years (2022 – 2026), no other program changes were requested in the waiver application.

Find more information about the Colorado Reinsurance Program at the DOI’s Reinsurance website.