DENVER – Colorado insurance regulators insisted Tuesday that they’re ready to open another health insurance enrollment period minus the state’s largest nonprofit health insurer.
But a panel of state lawmakers wasn’t entirely convinced that the recent closure of Colorado HealthOP won’t be a precursor of pricier health care and bigger troubles for the state-run insurance exchange.
The lawmakers unanimously approved a permanent CEO for Colorado’s Connect For Health. That’s the insurance-shopping marketplace set up a few years ago as part of the federal health care overhaul.
But Republicans on the bipartisan panel said they fear the state-run exchange may be in serious trouble. That’s because the exchange’s largest single insurer, Colorado HealthOP, was shut down by state regulators earlier this month because of precarious finances.
Colorado HealthOP had more than 80,000 customers, or about 40 percent of all business on the exchange.
Some wondered how many of those customers won’t be able to afford the plans when open enrollment for 2016 begins on Sunday.
The remaining individual plans on the insurance exchange average about 12 percent higher than last year, according to the state Division of Insurance.
“This is a big deal,” said Sen. Ellen Roberts, R-Durango, who leads the oversight panel. “This could just be the tip of the iceberg. So much is at risk here for so many people.”
Roberts was referencing the federal announcement last month that the government wouldn’t be able to cover most of the expense with a fund it had set up to help insurers for the first few years of the health-care overhaul.
Open just two years, Colorado HealthOP relied heavily on that fund. The state Division of Insurance announced Oct. 15 that Colorado HealthOP wouldn’t be allowed to sell 2016 plans because of precarious finances, meaning it couldn’t guarantee claims would be paid.
Exchange officials told lawmakers Tuesday that they had plans in the works for Colorado HealthOP’s failure, and customers wouldn’t face long hold times or other delays when open enrollment begins Sunday.
“What we’re supposed to do is help people get insurance, that’s what we’re built to do,” said Kevin Patterson, Connect For Health’s new permanent CEO.
Lawmakers asked Division of Insurance officials how much it would cost to close down Colorado HealthOP. Estimates ranged from $40 million to $70 million, costs that will be passed on to other insurance ratepayers.
The final tally will depend on how many claims the company incurs through December, when its policies run out.
“Everything at this point is just hypothesis,” said Scott Lloyd, the agency’s manager of fiscal affairs.
Connect For Health has repeatedly said it is financially viable without government support. Lawmakers worry that some Colorado HealthOP customers may simply go without insurance, undermining enrollment goals for the exchange.
“We don’t know how many people are going to look at these new rates and say, ‘I can’t afford that,”’ said Sen. Beth Martinez Humenik, R-Thornton.
The panel meets again in December for an update from both the exchange and insurance regulators about how the market is responding to Colorado HealthOP’s closure. Open enrollment ends in January.
