Cuts to Colorado High-Risk Pool Likely To Increase Employer Premiums

"Dramati[c]" funding cuts to Colorado's high-risk insurance pool will lead to additional fees for health insurers, who say they will pass those costs on to their customers, primarily businesses, the Denver Business Journal reports. The pool, called CoverColorado, which offers health insurance to about 3,800 low-income residents who have pre-existing medical conditions and have been denied private coverage, is funded by the state and beneficiaries' premiums. To offset a state budget deficit, state lawmakers voted to "raid" one of the program's main revenue sources, allocating less money to the fund this year than it has in the past. CoverColorado also is dealing with an influx of participants -- 1,000 members have joined over the past year and about 150 members have joined per month for the last three or four months -- in part because Aetna U.S. Healthcare is discontinuing its plans for small businesses. CoverColorado expects to pay about $21 million in claims this year, compared with $11 million in 2001, the Journal reports. Because the program's costs are expected to exceed its revenue, the state is permitted by law to impose fees on private insurers to help pay for the program. "Ultimately [the fees are] going to be borne by the employers," Cigna Healthcare President Daryl Edmonds said, adding, "The state of our economy has forced decisions to be made that I don't think were originally intended. ... The assessment will be coming earlier than expected" (Fletcher, Denver Business Journal, 5/17).