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Colorado’s health insurance exchange is sustainable … for now

Michelle Decker, left, an employee of Connect For Health Colorado, the state's health care exchange, explains options and procedures to Virginia and Jose Sotelo, who signed up for insurance on the last day before fines are imposed, in Denver, Monday, March. 31, 2014. Colorado has already exceeded baseline federal goals for enrollment. As of last week, 106,000 Coloradans had signed up for private insurance since the exchange opened in October. Another 151,000 had enrolled in Medicaid. (AP Photo/Brennan Linsley)

DENVER — Colorado’s state health insurance exchange is in a position to be financially sustainable through 2019, though changes to the federal health care law could easily change that scenario, state auditors reported Tuesday.

An audit presented to lawmakers warned that changes to the Affordable Care Act could cut revenues for the exchange known as Connect for Health Colorado, which launched in 2013 and currently enrolls 178,000 Coloradans.

State insurance marketplaces were authorized and, initially, federally funded, under President Barack Obama’s health care law. Federal grants to Colorado totaled nearly $190 million before they ended in June 2016.

The Senate voted Tuesday to debate legislation to overhaul the nation’s health insurance rules.

Auditors determined that Connect for Health will have $19 million in hand in 2019 if it continues to cut administrative costs and if enrollment doesn’t decline. The exchange receives no state general funding but generates income in part from fees and donations paid by participating insurance companies.

Over the past two years, the exchange reduced costs by more than a quarter by reducing staff and renegotiating its call center and information technology contracts, the report found.

Auditors did urge exchange staff to more closely document any changes in contracts with private vendors. And at the urging of GOP Sen. Tim Neville, a member of the Legislative Audit Committee, exchange CEO Kevin Patterson pledged to eliminate a requirement that consumers filing formal complaints with the exchange do so via the Postal Service, instead of electronically or by phone.

The exchange reported $41 million in income and nearly $50 million in expenses between July 1, 2016 and May 31 — but the roughly $9 million deficit is eliminated by discounting depreciation costs, auditors said.

Tuesday’s report did not address a federal audit in January that recommended Colorado repay nearly $9.7 million in federal grants used to set up the exchange after concluding that the money was misspent or not properly accounted for. The exchange disputed that finding.

Colorado Republicans abandoned an effort this year to end Connect for Health Colorado and let consumers seek health insurance on the federal exchange or in the private sector. The proposal had no chance either in the Democratic House or with Democratic Gov. John Hickenlooper.

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