Colorado health insurers plan to pass $40 million fee onto policyholders in the state

Colorado insurers say health care premiums could increase by hundreds of dollars in 2027.

The warning comes as state lawmakers consider $40 million in new fees on insurers that the companies say they'll pass on to policyholders. 

Democratic state Sens. Iman Jodeh and Kyle Mullica are sponsoring a bill that would bail out the Health Insurance Affordability Enterprise, which is short $140 million.

The enterprise subsidizes care for 176,000 Coloradans on Connect for Health Colorado and 6,700 undocumented immigrants on OmniSalud. That's in addition to supporting the Colorado Reinsurance Program, which helps cover high-cost claims.

"At a time when immigrants' access to coverage and rural access to health care are under attack nationally, Colorado must lead in ensuring health coverage and health care remain accessible to all," Isabel Cruz, who is with the Colorado Consumer Health Initiative, said before Colorado's Senate Finance Committee.

The bill would allow the enterprise to sell $100 million in bonds and assess a $40 million fee on the state's five biggest insurers.

"What's going to happen is this fee is going to be passed on to everyday Coloradans, employers, small businesses, and that's going to drive up costs in a state that everyday Coloradans are already complaining about housing affordability, health care costs, gas," said Kevin McFatridge, the executive director of the Colorado Association of Health Plans.

McFatridge says insurers have already paid more than $700 million in fees to support the enterprise over the last six years. If the bill passes, he says premiums for some families could go up by another $500 per person per year.

Meanwhile, as Republican stet Sen. Barb Kirkmeyer noted, undocumented immigrants on OmniSalud pay no premiums. She asked bill supporters if they should. "Do you think that everyone getting insurance should at least pay some insurance premium for that insurance?" Kirkmeyer asked. 

"I think insurance should be affordable to everyone, so I don't think that means everyone should pay some type of premium because I think it's a right," said Vanessa Martinez with the Colorado Organization for Latina Opportunity and Reproductive Rights.

Several members of the Finance Committee also questioned whether the enterprise should take on $100 million in debt by selling bonds for a one-year fix.

"We're creating bonds, taking a loan to pay for our costs for this year, but we don't know where we're going to be next year," Democratic state Sen. Chris Kolker said. "Why aren't we cutting costs this year?"

Bill sponsors and Insurance Commissioner Mike Conway say they're working on a long-term funding source. But, without the bill, they say thousands of Coloradans could lose coverage due to cost.

"These are people, and they matter," Mullica said. "And them being able have access to health care matters."

Kirkmeyer responded by saying that a $40 million increase in premiums could also result in more uninsured.

"It matters to a lot more people than the ones who are receiving these benefits," Kirkmeyer said. "It matters to the people who we have to go and explain to why their insurance could go up by $500 a year. What are we supposed to tell them?"

Kirkmeyer also warned that, under the Taxpayer Bill of Rights, any entity paying a fee must get some benefit from it, and it's questionable whether insurers benefit from this fee.

She says the bill could result in a lawsuit that would jeopardize the entire Health Insurance Affordability Enterprise.

While most of the Finance Committee members expressed concerns with the bill, it passed on a party line vote and heads to the full Senate for debate.