ICYMI: Recent Analysis of Colorado Health Insurance Ignores Recent ACA Subsidies As Lawmakers Consider Proposal For New State Government Health Insurance System

Mar 31, 2021

DENVER – As Colorado lawmakers consider HB21-1232 to create a new state government-controlled health insurance system, consideration of the new federal resources available to lower insurance premiums for Coloradans cannot be overlooked.

The American Rescue Plan (ARP) made new funding available for Colorado to build on what’s working in health care. For people who didn’t qualify for assistance but were not able to afford full-price premiums, the rules have changed with President Biden’s March 11th signing of the bill. ARP aims to make health insurance more affordable for people hard-hit by the pandemic and the provisions include an expansion of Affordable Care Act subsidies, new COBRA subsidies, and additional Medicaid coverage.

ARP increases federal subsidies available to Coloradans in two key ways:

  • Broadens eligibility. Makes Coloradans at higher income levels eligible for premium subsidies on individual market coverage, and would remove the current 400% FPL eligibility cap of $51,520 for individuals and $106,000 for a family of four.
  • Increases affordability. Increases the premium subsidy amounts that go to individuals enrolled in individual market coverage.

Colorado’s Health Insurance Affordability Board ARP analysis estimates that for Coloradans at 400% FPL and below, the newly available federal subsidies will decrease monthly premiums by 17-33 percentand total ACA enrollment is expected to increase by almost 19 percent. (pages 6-8 and 29-36 of the analysis available here)

During 2021 and 2022, individuals and families above the income cutoff can access premium tax credits and the amount they could pay will be capped at no more than 8.5 percent of their household income for a plan purchased through the state or federal marketplaces.

Nearly 15 million uninsured Americans could now qualify for newly available premium subsidies if they enroll through the federal or state marketplace, the Department of Health & Human Services estimates.

73 percent of voters prefer for lawmakers to BUILD ON Colorado’s health care system rather than create a new state government option.

It’s clear that consideration of the new federal resources available to lower insurance premiums was overlooked as lawmakers rushed to push the legislature to swiftly consider another state government option proposal.

When it comes to Colorado’s health care – there’s simply too much at stake to put the health care system at risk. It’s time to slow down and make sure we’re not wasting Colorado’s limited tax dollars on problems that have already been solved by the recent passage of the American Rescue Plan.