Colorado Proposes $13 Million Fee to Fund Obamacare Exchange


The federal government picked up the tab for the 14 states and the District of Columbia that decided to build their own health insurance exchanges under Obamacare. The total price of the multi-state build-out ran about $3.8 billion, although it wasn't exactly a huge success: Seven of the states experienced significant problems, and in some cases total failure, with their exchanges.

Going forward, however, the feds aren't kicking in as much cash, which means that states running their own exchanges have to figure out how to fund their own operations. Trouble is, the enrollment numbers aren't working out quite the way they were expected in some places. So states are considering some additional measures—by which I mean fees—to make up the difference.

For example, Colorado is considering instituting a $13 million fee to keep its exchange fiscally afloat. Via Health News Colorado:

 A $13 million fee on all Coloradans with health insurance would pay half the operating costs at the state health exchange next year and in 2016 under the newest financial projections.

The proposed fee would affect at least 875,000 people and includes Coloradans who get their insurance through their employers or outside the exchange.

Exchange managers announced earlier this week that they sold private health plans to 124,000 people through the end of March. People who buy through the exchange will get hit with two fees. They are currently paying a user fee of 1.4 percent and that fee is projected to rise as high as 3 percent by 2017. On top of the user fees, people who buy through the exchange will also pay the fee that exchange managers are calling a "general market health insurer assessment."

If the plan is approved, people who get insurance outside the exchange, as well as those who buy exchange policies, will still end up paying to keep the exchange going.

The proposed fee hasn't been put in place yet, but the state is going to have to do something. Legislators "recognized there would be a need for the assessment in the second and third year," when federal funds were no longer sufficient, Colorado's exchange CEO Patty Fontneau told The Denver Post.

Another option would be to cut expenses to match revenues. Exchange board member Eric Grossman told Health News Colorado that the exchange should "stand on its own based on revenue generate through the business."

"To be a fiscal steward of taxpayer dollars, if we have lower revenues, we have to have lower expenses," he said. "That's how you run a business." Well, a "business" that received $168 million in federal exchange grants to get started, anyway.

Colorado isn't the only state that has expressed concern about the future of its exchange finances. Washington state is also considering an insurance company tax, which would inevitably be passed on to consumers. Rhode Island wants to keep using federal funds for a little while longer, but doesn't seem to have a real idea of how to make the books add up after that. And Minnesota and Oregon, which were among the states with serious technical troubles, are looking for ways to cut down on their expenses, according to an Associated Press report from February. (Oregon may end up ditching its $303 million exchange, which was intended as a model for other states, in favor of joining the federal system.) 

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  1. Why does free and affordable cost so much?

  2. Obamacare is the stupidest law ever.

    1. But, but, this is what the American people wanted! So the people in Colorado should be happy to pay this tax.

    2. If the Obamacare model were applied to SS/Medicare we would save over $800 billion a year in taxes paid.

      (model = means-tested, cost-shaving, privatization)

      1. Wait, what? That is what the “Accountable Care” in the title does. It applies Accountable Care Standards (including requiring improvements in outcomes to get paid) to CMS (Medicare and Medicaid) providers. I mean, that’s what the law claims to do. Although the keep pushing the accountability.

      2. But what about the “taxes saved” if you just got rid of the whole fucking mess all together? Why is it so critical that it is there in the first place? Oh yeah, “right to health insurance” and all that.

  3. Obamacare: Fucking people in the ass since 2014.

  4. A $13 million fee on all Coloradans with health insurance would pay half the operating costs at the state health exchange next year and in 2016 under the newest financial projections.

    Perpetual Motion Tax: fucking geniuses, they are!

  5. Making health insurance affordable by adding taxes and fees to it. Brilliant!

    1. My company just had a meeting on what to do when we have to renew in June. If we select something that has a higher deductible, fewer options, and higher co-pays, we are still looking at a 26%-28% increase. Wow. What a great deal.

  6. Wait, but everybody told me that the Feds were giving away free money and that not setting up your own state exchange was dumb because… free money!

  7. Another option would be to cut expenses to match revenues.

    Whoa, whoa, whoa.

    Why don’t you just send death squads to all the nursing homes, with instructions to club the aged and infirm to death as they sleep?

  8. “Going forward, however, the feds aren’t kicking in as much cash”.

    Actually the ACA says that beginning in 2015, the state exchanges have to be self-sustaining. And there’s a good question whether states that have “leftover” federal money can continue to use it for exchange operations in 2015.

    In light of the Colorado situation, it doesn’t seem like such a great thing for a state to have implemented an exchange. What are the citizens of Maryland, Oregon, Minnesota, etc. gonna get hit with? Poor fools.

  9. Failing business? Easy! Just steal money from people, they won’t mind!

  10. The very first lie in the Affordable Care Act is its title.

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