HHS Approves Colorado's Section 1332 State Innovation Waiver
According to a June 23 press release, the U.S. Department of Health and Human Services (HHS) announced the approval of Colorado's Section 1332 State Innovation Waiver amendment request to create the "Colorado Option," a state-specific health coverage plan that increases health coverage enrollment and lowers costs, making insurance more affordable and accessible for approximately 10,000 Coloradans beginning in 2023. The release says that “It is designed to reduce racial and ethnic health disparities by providing new coverage options for Coloradans, reflecting the Biden-Harris Administration's commitment to advancing health equity.”
The release adds that “Section 1332 of the Affordable Care Act (ACA) allows states to apply for State Innovation Waivers to pursue innovative strategies for providing residents with access to high-quality, affordable coverage. Colorado is the first in the nation to adopt this waiver to introduce a new and more affordable state-based health insurance option, and leverage federal savings to support state subsidies to improve affordability and coverage initiatives. Colorado projects that approximately 32,000 Coloradans will gain health insurance under the amended waiver by 2027, which would be an increase of approximately 15% in the individual market.”
That said, “This 1332 waiver amendment implements the Colorado Option, which lowers premiums and health care costs while making it easier for consumers to compare their coverage options and select the best plan that fits their needs. Starting in 2023, the Colorado Option will be available to all Coloradans who enroll in health insurance plans on the individual market (i.e., not through an employer) and small employers with less than 100 employees. Colorado Option plans will lower health insurance premiums for individuals, families, and small businesses by up to 15 percent by 2025.”
The Colorado Option will work together with Colorado’s existing section 1332 waiver. And, according to the release, the amended waiver will lower premium costs by an average of $132 per person per month.
Additionally, the Colorado Option will cover benefits required by the ACA including primary care, behavioral health, and prenatal visits at no cost. It will combine standard health ebenfit plans, required premium reductions, and increased state subsidies for individuals currently eligible and those not currently eligible for federal subsidies under the ACA—with the goal of making coverage more affordable. Colorado’s waiver plan increases competition by creating premium reduction levels for the Colorado Option and applies improved regulatory and programmatic processes as a backstop to ensure providers, hospitals, and issuers meet those targets.
“ In doing so, the amended waiver will generate savings that the federal government will pass on to the state to implement their waiver (referred to as federal "pass-through funding"),” the release continues. “The state will use these savings to implement the amended waiver and make coverage more affordable; this will include providing state-based subsidies through a state program to enhance the financial help available to Coloradans enrolling in coverage, ultimately increasing access to care in the state. As a result, individual market consumers are expected to continue seeing lower premiums, which should attract new consumers while also keeping current consumers enrolled in coverage.”
HHS Secretary Xavier Becerra was quoted in the release saying that "We are thrilled to partner with Colorado in our shared commitment to lowering healthcare costs and ensuring greater access to quality, affordable care. The Colorado Option will help thousands more families sign up for health coverage. I applaud Governor Jared Polis and encourage all states to pursue innovative ways to ensure healthcare is within reach for their residents."
