The financial survival of the state’s marketplace depends on being able to recover millions of dollars.
The Colorado health insurance exchange is scrambling to be able to recover millions of dollars that were racked up in the expansion of the state’s Medicaid program in order to make sure that the marketplace will be able to remain financially viable.
That said, the Connect for Health Colorado marketplace was not designed for the collection or counting of reimbursements.
According to the new interim CEO of Connect for Health Colorado, Kevin Patterson, “We right now have zero in terms of our Medicaid reimbursement,” adding that “Zero is not the right number.” The previous interim CEO of the health insurance exchange, Gary Drews, explained that being able to recover the costs from the Medicaid expansion will be “the make-or-break piece” of the financial puzzle for the marketplace, which will no longer continue to receive grants from the federal government after this year.
That said, the health insurance exchange did make an important financial move last week to help its survival.
Last Thursday, the board of directors for Connect for Health Colorado voted unanimously for an increase in the fees for the insurance exchange. This fee has to do with a certain charge that insurance companies must pay for every health plan that they sell over the marketplace. That fee is typically passed on to the customers of those insurers. It had previously been 1.4 percent and will now be more than doubling to reach 3.5 percent. On a $4,000 plan, that equates to $84 per year.
_________________________Random Success Quotes to Remember ~ “People will accept your ideas much more readily if you tell them Benjamin Franklin said it first.” - David H. Comins
Another area where the Colorado insurance exchange has increased its charges to help to ensure its financial viability was in its assessment charges. Those are made monthly for each plan that is sold, regardless of whether or not it is on the marketplace. That has been $1.25, but now it will increase to $1.80 as of 2016.
That said, the major potential revenue source that the health insurance exchange is hoping to be able to tap into is a reimbursement from the expenses that were faced during the expansion of the state’s Medicaid program. Drews spoke to a legislative oversight committee, saying that “We were not set up to receive Medicaid reimbursement,” but that “Most of the other states’ (exchanges) have been.”