Colorado is considering a program to reduce healthcare premiums in the individual market. Towards this end, the State of Colorado Division of Insurance commissioned a study to determine the cost and feasibility of such a program. As part of the update, the Division requested an analysis of lowering health care premiums by lowering costs using a Medicare Reference Based pricing model for reinsurance program claims. A reinsurance program, established by the state, would pay for a portion of claims for high cost members in the ndividual ACA-compliant health insurance market. The reinsurance program would pay a percentage of claims, above the attachment point and up to a cap. These claims would reduce the total claims paid by carriers in the individual market. Therefore, any reductions to claims costs due to reinsurance would reduce premiums as well.
