CMS approves Colorado’s request for state-based reinsurance program

On July 31, 2019, the Centers for Medicare and Medicaid Services (CMS) approved Colorado request to develop state-based reinsurance programs under Section 1332 of the Affordable Care Act (ACA).


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Colorado now has federal approval to run the reinsurance program for two years and can begin implementation beginning January 1, 2020. 

“Colorado has requested a waiver of the PPACA requirement for the single risk pool in order to implement a reinsurance program for plan years 2020 and 2021. The Departments are granting Colorado ‘s application to waive the single risk pool requirement in the individual market under section 1312(c)(l) of the PPACA to the extent it would otherwise require excluding total expected State reinsurance payments when establishing the market-wide index rate for the purposes described in the state’s application,” the approval letter states

The state’s $249 million reinsurance program is expected to reduce 2020 premiums by 16 percent compared to what they would be without approval of the waiver. The federal government is expected to contribute $162 million while state funds are expected to account for $87 million. The insurance commissioner can assess insurers if Congress suspends the health insurance tax.