Connect for Health Colorado board members met Monday to consider whether the health insurance exchange will remain independent or shift some operations to its federal counterpart.
Out of concern for the exchange’s long-term stability, state legislators requested the committee develop alternatives to remaining a stand-alone operation.
Brian Braun, the Connect for Health chief financial officer, introduced three scenarios Monday to members of the board’s finance and operations committee.
The first would have the exchange continuing as is with no change in the system’s architecture or in current expenditure levels over a 24-month period ending in June 2018. The scenario assumes only a slight increase in enrollment, according to Braun.
The second model would involve adding upfront costs from modifying technology systems, such as making user interface improvements, but also reducing expenditures by 10 percent by the end of fiscal 2017 and an additional 5 percent by 2018.
The hope with that scenario, Braun said, is to “get to a point at the end of two fiscal years where the exchange is operational as a stand-alone.”
Under the third option, the exchange would lease some services to the federal government, such as operation of the reinsurance program and assessment or determination for Medicaid and Child Health Plan Plus eligibility, said Adele Work, chief information officer.
The exchange would remain responsible for the “majority of marketplace functions, including administration, in-person assistance and consumer outreach and education,” Work said.
Federal leasing would result in reductions in customer service center costs by 90 percent and about 50 percent in technology costs.
Braun said moving forward requires “more work to even determine if it’s a financially viable option or not.”
Under the Affordable Care Act, states were able to set up their own exchanges to serve as marketplaces for insurance plans, use the federal exchange or partner with the federal exchange.
Kevin Patterson, Connect for Health Colorado’s chief executive, said the transitional expenses for the federal leasing option have yet to be accounted for and the transition likely would not be implemented until the end of fiscal 2018.
“We had a question to discuss today about options of financial stability and structure, so we want to reassure and make it known that we’re making progress,” Patterson said. “It’s not a decision. We’re just beginning to look at the framework. I think we’re at an informative point in this juncture for us to begin to frame the conversation.”
The committee also said that introducing these scenarios is only in terms of a “numbers framework,” and there are other policies that need to be considered before moving further.
Braun said some of those next steps include introducing timing and a budgeting plan to present to the board at the next meeting.
“We need to show we can manage our expenditures and operations on our own, which means starting now to get there by 2018.”
Some state legislators are concerned about the exchange’s long-term stability as federal grant funding is set to expire, and enrollment numbers came up short last year from their projected plan which was adopted last June.
The exchange signed up about 1 53,000 people with commercial coverage during the most recent enrollment period. In June, when the exchange board approved a budget with a $13.3 million deficit and raised its fees, staff projected nearly 170,000 sign-ups.
Natalie Munio: 303-954-1666, nmunio@denverpost.com or @nataliemunio
