Charting a Strong Path Forward: A Message from CEO Patty Fontneau
More than 131,000 Coloradans have now signed up for private health insurance through Connect for Health Colorado. While open enrollment is now closed, our team remains very busy helping the many people in our state who are still eligible to get health insurance. We’re also continuing to make improvements to our technology as we plan and prepare for the next open enrollment period and beyond.
There has been a good deal of discussion and media coverage regarding the financial health and future of our Marketplace.
I want to be clear: Connect for Health Colorado is one of the most financially secure marketplaces in the nation. We have a solid plan that moves us to become self-sustaining by January 2015, when our federal start-up grants supporting operations will be gone.
This financial model is a diverse funding approach approved by our Board of Directors and supported by the State Legislature in 2013.
The plan enables us to go from building and launching our Marketplace, to serving increasing numbers of Coloradans during the transition from federal grants, by using an existing broad assessment and other funding. It ensures we are fiscally secure and have a diverse revenue base as we move forward. Each piece of our fiscal model is important:
- Use federal grants to support creating, building, launching, enhancing, maintaining and operating the new Marketplace for Coloradans. These grant funds are only partially spent; they continue to be available to us for the last piece of technology build until June 30, 2015, the end of our next fiscal year.
- Make use of legislation passed in 2013 (HB13-1245) that allows Connect for Health Colorado to access existing funding used to support CoverColorado –insurance for people who could not get coverage because of pre-existing conditions. (CoverColorado is closing in 2014.) The “high risk pool” fund was created in 2001 by charging insurance companies a monthly per-policy amount – a broad-based assessment that reached as high as $3.75 per policy per month. The new law allows Connect for Health Colorado to set the assessment only between $0 and $1.80, and use it only through 2016. Insurance companies have paid this for 13 years and at much higher rates; the Marketplace did not charge the allowed assessment in 2014 because other funding was sufficient.
- The legislation also allows Connect for Health Colorado to evaluate other products that make sense to our customers and markets, accept health carrier tax donations and apply for foundation grants.
- Establish a small administrative fee on all products purchased through the Marketplace. For 2014 and 2015 it was set at 1.4%, the lowest in the country among Marketplaces using an administrative fee. This includes all 36 states using the federal Marketplace, which charges 3.5%. (Some marketplaces are funded by their state taxpayers. Connect for Health Colorado receives nothing from our state General Fund.)
- Combining the temporary broad assessment (at its highest level) on insurance companies and the permanent administrative fee on Marketplace products still makes our average total administrative fee the lowest in the country for states using an administrative fee. Again, a few state Marketplaces are funded through their state general fund, which is not available to Colorado.
As a public non-profit, we’ve been transparent about the roadmap we’ve set to reaching our goals and continuing to meet our mission to improve access, choice and affordability of health insurance for Coloradans.
We are operating below budget and, compared with the six most comparably sized state Marketplaces, our budget is dramatically lower and our staffing numbers the leanest.
We’ve worked hard to be one of the most sustainable state marketplaces, and we’re extremely proud of the tremendous success in expanding coverage and keeping fees low. We thank our many partners for their hard work and support and look forward to serving Coloradans for many more years.
Patty Fontneau, CEO