Obamacare exchange asks for fee on all insurance policies

Barb Wire

The fee would pay for half of the annual operating costs of Connect for Health Colorado, the state Obamacare exchange, according to Health News Colorado.

The exchange’s latest financial plan comes soon after its oversight board rejected a proposal to hike fees on those who use the website from 1.4 percent to 1.7 percent. Connect for Health Colorado staff has said the increase was needed to keep it solvent.

Board members said staff should look at cutting expenses before raising fees, and many had the same reaction to the proposed $13 million fee, which is being called a “general market health insurer assessment.”

Others call it an illegal tax.

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“Not only is this not fair,” Republican Sen. Owen Hill is quoted as saying by Health News Colorado, “it really is against the law. We have a law here in Colorado that says you can’t increase taxes without a vote of the people.”

Hill sits on the exchange’s legislative oversight committee, which will hold a hearing about the exchange’s financials on Thursday.

Questions about how exchange spends its money were raised from nearly the moment it opened for business last year. CEO Patty Fontneau — who is paid more than $190,000 per year — raised eyebrows by asking for a raise and a bonus even as the exchange failed to meet even worse case projections for enrollment. Board members were also concerned to learn that the exchange hired outside lawyers — some for up to $575 per hour — rather than use lawyers with the state Attorney General’s office.

Democrats killed a bill authorizing an expanded audit of the exchange earlier this session.

“They’ve carved out this special protection for themselves by limiting themselves from an audit and limiting themselves from the oversight of elected representatives,” Hill told Health News Colorado. “Obviously, I’ll keep fighting to get more transparency.”

By law, the exchange must be self-sufficient by January and legislation passed last year allows for a per-customer fee to be imposed on insurance carriers, which would then be passed on to the consumer. To collect the additional $13 million would mean all 875,000 insured Coloradans would see an increase of $1.25 per month on their health insurance bill.

The exchange board will vote on the fee in May, Health News Colorado reported, but not many members seem eager to approve it.

“I’m personally against any increased assessment against anybody,” said board member Dr. Mike Fallon. “It’s another tax. It’s another way of redistributing costs across the entire Colorado marketplace.”

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