By Katie Kerwin McCrimmon
Colorado’s health exchange board on Monday approved a $66.4 million budget for the next fiscal year to be funded in part by a $13 million fee on all Coloradans with health insurance.
The costs to run the exchange are far higher than the $26 million a year that managers have long anticipated. They are continuing to spend federal tax dollars for some of the expenses and have vowed to reduce costs to about $26 million in future years.
The budget and $13 million fee passed with the support of nearly all the board members. Steve ErkenBrack, president of Rocky Mountain Health Plans, abstained from voting citing a conflict of interest. Ellen Daehnick voted no.
“I just don’t have any faith that that we’re going to get value for our money,” Daehnick said. “It’s not clear that this organization is going to be able to pay its bills. Given that these are public dollars, those are two very big problems. Those are deal breakers.”
Dr. Mike Fallon, another board member said during discussion of the budget that he was concerned about charging $13 million in fees to all Coloradans with health insurance, even those who get it outside the health exchange.
Fallon wanted the board to consider lower fees, but Insurance Commissioner Marguerite Salazar said she would have supported higher fees.
“We’re still building this airplane,” Salazar said. “Now would not be the time to go lean. We can always do that later … We have a chance to make this a robust, real successful exchange.”
Fallon responded that “this is somebody else’s money.”
Despite his concerns about imposing fees on hundreds of thousands of Coloradans who don’t get insurance through the exchange, Fallon ultimately supported the proposed budget and the $13 million in fees.
Many of the board members said they wanted to be sure that Connect for Health Colorado had enough money to succeed since they didn’t like the idea of Colorado defaulting to the federal health exchange as states like Oregon, Maryland and Massachusetts may have to do after their state-based exchanges failed or struggled with IT problems.
The new ,which goes into effect July 1, includes:
- $29.5 million for technology, compared to $38.5 million budgeted for fiscal year 2014.
- $13.6 million for the customer service center, compared to $22.5 million budgeted for fiscal year 2014.
- $7 million for salaries, legal and accounting fees and travel, compared to $7.4 million budgeted for fiscal year 2014.
- $6 million for the assistance network, compared to $10.1 million budgeted for fiscal year 2014.
- $4.8 million for marketing, communication and outreach, compared to $10.1 million budgeted in fiscal year 2014.
- $2.3 million for consulting and operations, compared to $5.4 million budgeted for fiscal year 2014.
Consumer advocates testified in support of the budget. Representatives of the Colorado Consumer Health Initiative and the Colorado Center on Law and Policy submitted a letter praising the assistance network, which gives people the opportunity to get face-to-face help in buying insurance.
“Health coverage guides are connected at the roots of our communities through Colorado and are trusted ambassadors for the (Colorado’s health exchange),” the advocates wrote. “They are trusted advocates for health — helping Coloradans access coverage through (the exchange) but also Medicaid and the Child Health Plan Plus.”
Anne Warhover, president and CEO of the Colorado Health Foundation, also testified in support of the budget. Her foundation last week approved an additional $2.5 million grant to support the assistance network on top of $2 million it had earlier given the exchange.
“Enrolling people in insurance is expensive,” Warhover said. “It’s difficult sometimes even for me to figure out. It’s harder to understand if you’ve never had it before.”
Warhover said the Health Foundation has spent millions in the past trying to boost enrollment in both private and public insurance.
“This is by far our highest return on investment,” Warhover said.