Colorado Obamacare exchange facing ‘dramatic’ cuts

Greg Campbell | Contributor

Connect for Health Colorado, the state’s health insurance exchange under Obamacare, is lowering its own expectations of how many people will enroll in the program.

This has lead its CEO to ask for a fee hike to prevent what she described as dramatic budget cuts.

Optimistic projections originally had as many as 204,000 people enrolling through Connect for Health Colorado by the end of March. But as noted by the website Health News Colorado, only about 90,000 have signed up so far.

The organization now expects a mere 152,000 to enroll through early next year — far too few to fund its $26 million annual budget.

Without increasing fees on those who buy health insurance through the website to make up for the shortfall, CEO Patty Fontneau told the board of directors it would be difficult to make it self-sustaining.

“I’m not sure the board understands how dramatic our expense cuts are going to be to hit $26 million [in annual operating costs],” Health News Colorado quoted Fontneau as saying.

She requested that the user fee of 1.4 percent be increased to 1.7 percent, which she said would raise an additional $2 million.

The exchange has already cost $177 million in federal money to get up and running. It’s required to be self-sufficient by next year.

Board members shot down the request, telling Fontneau the solution wasn’t to make health insurance more expensive, but to cut costs.

“You don’t just say, ‘Let’s raise the administrative fees because that covers our backside,’” said board member Dr. Mike Fallon. “I know that’s the easy way out. But it’s more fiscally responsible to say, ‘I’m going to downsize if need be.’”

Adding to the pressure is President Obama’s announcement last week extending the deadline for some plans to roll over to Affordable Care Act compliance until 2016. Fontneau worries that will continue to depress the number of people willing to sign up for health care through the exchange.

“We were absolutely hit by many plans offering early renewals to their customers,” Health News Colorado quoted Fontneau as saying. “We were anticipating picking up those individuals and families at the end of this year.”

All but one of the board members voted to reject the fee hike.

Fontneau raised hackles last year by requesting a pay raise and a bonus, even as the Colorado exchange failed to meet even its worst-case scenario goals by December. She eventually withdrew the request.

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