Colorado Insurance Commissioner Faces Backlash Over Reinsurance Fund Proposal
DENVER — A proposal by Colorado’s top insurance regulator to divert funds from the state’s reinsurance program to cover healthcare for undocumented immigrants has ignited a firestorm of controversy, with critics warning of potentially devastating consequences for families across the state.
Colorado Insurance Commissioner Michael Conway reportedly suggested redirecting reinsurance funds to the OmniSalud program, which provides healthcare coverage for low-income immigrants residing in the U.S. unlawfully. The move, characterized by one meeting participant as “defunding reinsurance,” has drawn sharp rebuke from lawmakers, the governor’s office, and healthcare advocates alike.
According to a presentation by Conway, the shift could lead to a staggering $13,000 annual increase in health insurance premiums for families in Western Slope communities.
Gov. Jared Polis has strongly opposed the proposal, emphasizing the vital role the reinsurance program plays in making healthcare more affordable for Coloradans.
“Reinsurance is a landmark bipartisan initiative that has saved Coloradans $1.6 billion, with estimated savings from 2025 pushing it to more than $2 billion, and helped more people access low-cost insurance coverage,” a spokesperson for the governor’s office said. “Governor Polis does not support defunding reinsurance for any purpose. colorado remains committed to continuing reinsurance to save people money. Without it,costs will go up and that is unacceptable.”
the Colorado Reinsurance program, established in 2019, aims to stabilize the individual health insurance market by helping insurers cover high-cost claims. The program levies a fee on hospitals, which combined with federal funds, offsets those high-cost claims. in turn, this is intended to reduce individual health insurance premiums, especially for those ineligible for Affordable care Act (ACA) subsidies.
Sen. Barbara Kirkmeyer, R-Brighton, condemned what she called Conway’s “totally unacceptable” actions.
“the commissioner,she said,doesn’t get to threaten people by saying he’ll take away money from reinsurance,a program that works,and hand it over to OmniSalud,the health coverage program for low-income people who are unlawfully staying in the U.S.,” Kirkmeyer said. “We should fund U.S. citizens first.”
Kirkmeyer added, “It’s inappropriate and out of line, and the governor should have a discussion with him. Where does he get off doing that?”
The controversy centers on House Bill 1297, currently stalled in the House Finance Committee. The legislation proposes changes to the fees charged to health insurance carriers under the state’s Health Insurance Affordability Enterprise, created in 2020. These fees currently stand at 1.15% of premiums for nonprofit carriers and 2.1% for for-profit carriers.
The funds generated cover the reinsurance program, the OmniSalud program, and subsidies for individuals purchasing insurance through the Health Insurance Exchange who meet federal income requirements.
HB 1297 seeks to increase these fees by 1%, partly due to concerns that federal subsidies for the ACA could be reduced. The bill’s fiscal analysis estimates a $67 million annual impact on insurers.
Opponents within the health insurance and business sectors argue that the bill places an undue burden on Coloradans already struggling with healthcare costs.
Rachel Beck of the Colorado Competitiveness Council said that when the fee was created in 2020, “it doubled the tax and fee rate on the fully-insured market,” referring to the 1.2 million Coloradans who get their health insurance through their employers in small- and medium-sized businesses.
Beck added that with HB 1297,”for every person who saves money through the reinsurance and OmniSalud programs,four people pay considerably more.” She questioned why, “such a small segment of Coloradans, who are already burdened by health insurance costs, [is] footing the entire $200 million tab?”
Kevin McFatridge of the colorado Association of Health plans described the tone of a recent Health Insurance Affordability Enterprise board meeting as “sharp and concerning.”
“(Conway) repeatedly expressed frustration and anger over HB25-1297, stating multiple times that he is ‘mad.’ He emphasized that he tried to be kind with the original proposal but is now prepared to ‘get ugly’ and pursue a more aggressive approach if the bill does not pass,” McFatridge said.
McFatridge added: “In a particularly troubling moment, (Conway) directed a clear warning toward the carrier representatives on the board — myself and Shannon Groves — about the consequences of our continued opposition.”
Conway reportedly warned insurance carriers, “If 1297 doesn’t pass, people will die.”
According to a presentation from the Division, if HB 1297 fails, it will also jeopardize funding for “gender-affirming care” and for state-paid abortion services.
Vincent Plymell of the Division of Insurance said that if the bill does not pass, “the Board will be faced with the impossible decision of either taking away coverage for 9,000 current OmniSalud enrollees OR increasing premiums for all individual market enrollees in 2026 by an average of nearly $6,000 annually (for a family of four).”
“And in places such as the Western Slope, that could be an increase of as much as $13,000 annually,” Plymell said. “The Board may choose a combination of these impacts, but those are the two options.”
Jason Hopfer, representing the Colorado Association of Health Plans, emphasized his group’s support for both reinsurance and OmniSalud, stating “but the Division and the administration have refused to meet us in the middle. Instead, they have threatened to further drive up costs for everyone.”
Counterargument:
While proponents of HB 1297 argue that the fee increase is necessary to maintain crucial healthcare programs, opponents contend that the proposed solution disproportionately burdens a segment of the population. Some analysts suggest that choice funding mechanisms, such as drawing from the state’s general fund or exploring other revenue sources, could mitigate the need for a fee increase on health insurance carriers.
The debate highlights the ongoing tension between ensuring access to affordable healthcare for all residents and the financial challenges of funding such programs. As lawmakers grapple with HB 1297, the future of Colorado’s healthcare landscape hangs in the balance.
FAQ
What is the Colorado Reinsurance Program? The Colorado Reinsurance Program is a state initiative designed to lower health insurance premiums by helping insurance companies cover high-cost claims. It is funded through a combination of state fees and federal funds.
What is the OmniSalud program? OmniSalud is a Colorado program that provides healthcare coverage to low-income immigrants who are not lawfully present in the U.S.
What is HB 1297 and how would it impact health insurance fees? HB 1297 is a bill currently under consideration in the Colorado legislature that proposes to increase fees on health insurance carriers to fund the state’s reinsurance and OmniSalud programs.Opponents of the bill argue that it would lead to higher premiums for many Coloradans.
Why is the Colorado insurance Commissioner proposing to defund a portion of the reinsurance program? Commissioner Conway is proposing to shift funds from the reinsurance program to OmniSalud as a consequence if HB 1297 does not pass.He has stated that the board will be forced to make an impossible decision of taking away coverage for OmniSalud or increasing premiums for citizens.
* How can I voice my opinion on HB 1297? Colorado residents can contact their state representatives and senators to express their views on HB 1297. information on how to contact your representatives can be found on the Colorado General Assembly website.
What are yoru thoughts on the best way to fund healthcare programs while ensuring affordability for as many Coloradans as possible?
Table of Contents
- 1. What are yoru thoughts on the best way to fund healthcare programs while ensuring affordability for as many Coloradans as possible?
- 2. Colorado Healthcare Crossroads: An Interview with Dr. Eleanor Vance on the Reinsurance Debate
- 3. Understanding the Colorado Reinsurance Program
- 4. The Proposal and Its Potential Consequences
- 5. The Role of HB 1297 in the Equation
- 6. Option Funding Mechanisms
- 7. The Broader Implications of the Debate
- 8. A Call to Action
- 9. Reader Engagement
Colorado Healthcare Crossroads: An Interview with Dr. Eleanor Vance on the Reinsurance Debate
Archyde brings you an exclusive interview with Dr. Eleanor Vance, a leading healthcare policy analyst from the Colorado Institute for Health Economics, regarding the ongoing controversy surrounding Colorado’s reinsurance program and proposed funding shifts. Dr. Vance offers insights into the potential implications of the proposed changes, the importance of insurance affordability, and the broader context of the ongoing debate.
Understanding the Colorado Reinsurance Program
Archyde: Dr. Vance, thank you for joining us. Coudl you start by explaining the core function of the Colorado Reinsurance Program for our readers?
Dr.Vance: Certainly. The Colorado Reinsurance Program is designed to stabilize the individual health insurance market. It provides financial assistance to insurers to cover the high-cost claims of individuals, which in turn, ideally reduces premiums across the board, making healthcare more affordable for a wider range of Coloradans, especially those who don’t qualify for federal subsidies.
The Proposal and Its Potential Consequences
Archyde: Colorado insurance Commissioner Michael Conway has proposed diverting funds, with significant pushback. What are the key repercussions of this shift, as you understand it?
Dr. Vance: The heart of the concern is the potential for increased premiums. If funds are diverted from reinsurance to cover healthcare for undocumented immigrants through OmniSalud, as proposed, it could result in a significant premium increase, especially for families, particularly in areas like the Western Slope. We’re talking about potentially thousands of dollars annually. Another significant concern is the potential impact on other crucial healthcare services like “gender-affirming care” or state-paid abortion services if HB 1297 does not pass.
The Role of HB 1297 in the Equation
Archyde: House Bill 1297 seems central to the debate. How does this legislation impact the funding of these programs?
Dr.Vance: HB 1297 proposes an increase in fees on health insurance carriers to fund both the reinsurance and OmniSalud programs. It’s a balancing act. On one hand, it aims to maintain and expand access to healthcare for both Coloradans and undocumented immigrants, but on the other, it risks increasing premiums for those already struggling with healthcare costs. The current fee structure seems to benefit the OmniSalud program while potentially increasing premiums for many more. The challenge lies in funding these vital programs without unduly burdening a segment of the population.
Option Funding Mechanisms
archyde: Critics suggest alternatives, such as using the state’s general fund. Is that a viable solution, in your view?
Dr. Vance: Exploring alternative funding mechanisms is crucial. drawing from the state’s general fund or other revenue sources could provide a more equitable solution. It’s essential to consider options that distribute the financial obligation more broadly. A diverse funding proposal is critical. If the fee increase is the only option, those premiums that families are forced to pay might potentially be higher.
The Broader Implications of the Debate
Archyde: This debate is a microcosm of the broader healthcare affordability challenge.What are the long-term implications of how Colorado addresses it?
Dr. Vance: This decision has rippling effects far beyond Colorado’s borders.How we address healthcare affordability sets a precedent for state and national healthcare policy.The choices made now will considerably impact access and effect the well-being of a vast segment of our population. A system of checks and balances between patient access and price management is key to a stable and healthy ecosystem for Colorado residents who rely on the healthcare system.
A Call to Action
Archyde: Dr. Vance, thank you for sharing your insights.Our readers are likely seeking to engage with this issue. Do you have any words of advice for those seeking to voice their opinions?
Dr. Vance: Absolutely. Colorado residents should contact their state representatives and senators. Share your concerns, your perspectives, and insist on a solution that balances access and affordability for all citizens. It’s a complex issue, but your voice matters. This isn’t just a cost analysis debate; it is about the financial safety and well-being of many Coloradans.
Archyde: Thank you, Dr. Vance. this has been an enlightening discussion.
Dr. Vance: My pleasure.
Reader Engagement
Archyde: What are your thoughts on the best way to fund healthcare programs while ensuring affordability for as many Coloradans as possible? Share your comments below – we look forward to hearing your views!
