Colorado Health Insurance Exchange Guide

Connect for Health Colorado is the official name of the Colorado Health Insurance Exchange. It is a marketplace where an individual or small business without coverage will be able to find and enroll into affordable plans. Enrollments are scheduled to commence in October 2013, with plans set to become active no later than the 1st of January, 2014.

The marketplace was established as required under the federal Patient Protection and Affordable Care Act (PPACA), better known as the health reform act. As per the requirements of this new law, all U. S. Citizens and legal residents must have healthcare coverage starting Jan 1, 2014. Many states are setting up their own exchanges as the main mechanism through which this law will be implemented.

About 500,000 previously ineligible people in Colorado will be able to avail of plans using CHC. This eliminates two-thirds of the state's existing contingent of approximately 750,000 uninsured individuals. The exchange can also be used by those who are already insured but want to shop around to find a better plan.

As of now, CHC is starting off with two platforms. One is the marketplace for individuals, and the other one is for small businesses with no more than 100 employees. This second marketplace, called SHOP, may become available to larger businesses from 2017 onwards, if the state so desires.

It is hoped that the establishment of CHC will reduce premiums by around 14-20 percent. This will be accomplished through an expansion of the market combined with competition for customers among providers offering plans in the exchange. Practically speaking, that works out to somewhere in between $1,510 to $2,160 per year in healthcare premium savings for families in Colorado.

The best part about this whole reform plan is that it transforms some of the worst rules in the old system. For example, providers participating in the exchange cannot turn away customers with preexisting conditions or charge them higher premiums than others. They also cannot refuse to cover a preexisting condition if it is normally covered under the plan for everyone else.

The federal government is paying for the entire cost of establishing these exchanges and their operational costs until 2016. After that, the state governments will start paying for 5% of the costs until 2020, at which time the state is expected to start paying for 20 percent of costs. Colorado alone is expected to get additional federal funding to the tune of $12 billion or more for all the expenses associated with the marketplace and other reforms.