DENVER (AP) – The board of directors of Colorado’s health insurance exchange is meeting Thursday to consider proposals that are likely to increase the cost to consumers.
Connect for Health Colorado staff have proposed raising administrative fees it charges to cover the costs of the technological and other infrastructure needed to allow consumers to comparison shop for insurance and get advice and access to financial aid. Fees are now 1.4 percent of premiums and typically passed on by insurance companies to consumers. Staff said in a presentation to the board ahead of Thursday’s meeting that the exchange also was seeking federal Medicaid reimbursements.
The board was considering fee increases up to 4.5 percent of premiums. For a family paying $1,000 a month in premiums for example, administrative costs that now are $14 could go up to $45.
Connect for Health Colorado staff studied the finances of four other states with exchange enrollments similar to Colorado’s 150,000 and determined they were able to generate at least $12 million more in revenue through either higher reimbursement fees, Medicaid reimbursement, or both.
Connect for Health spokesman Luke Clarke said he knew of state-based exchanges charging administrative fees up to 3.5 percent. And he said some exchanges get money from the state or reimbursement from Medicaid for helping applicants sign up for public insurance, while Colorado now gets funds from neither of those sources.
On Medicaid, Clarke said Connect for Health was working with the Colorado Department of Health Care Policy and Financing and the federal government’s Centers for Medicare and Medicaid Services on meeting requirements for reimbursement.
Adam Fox, spokesman for the Colorado Consumer Health Initiative, which lobbies on health care policy on behalf of consumers, said when the marketplace was formed, it was hard to predict what level of administrative fees would be right. Colorado’s fees are among the lowest in the country, he said.
Insurance providers want to see the fees before submitting their rate plans to the exchange, which they must do at the end of the month. Neil Waldron, chief marketing officer for Rocky Mountain Health Plans, which serves 200,000 members, said choosing the right figure on fees was a matter for the Connect for Health Board, but “we need to make that decision as soon as possible.”
Colorado has avoided problems associated with other state exchanges established under the Affordable Care Act. But a limited December state audit report said more than $30 million in payments and contracts lacked proper documentation or procedural controls. Lawmakers have called for broader reviews.
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