A record number of people signed up for health insurance through Colorado’s exchange this year

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Prepping an HPV vaccination. (Pan American Health Organization/Flickr)

My daughter always says, "This is going to hurt a lot." (Pan American Health Organization/Flickr)

More than 175,000 people signed up for health insurance for 2017 through the state's Connect for Health Colorado insurance exchange, officials with the exchange said on Monday. That's a 12 percent increase from the year before and a record since the exchange was rolled out in late 2013.

On Tuesday, Senate Republicans will discuss getting rid of Connect for Health Colorado in favor of Coloradans using the federal exchange instead.

The legislation is sponsored by Sen. Jim Smallwood of Parker in the Senate and House Minority Leader Patrick Neville of Castle Rock in the House. This bill is not likely to get a lot of traction in the House, which is controlled by Democrats, but the hearing before the Senate Finance committee Tuesday is an opportunity for Republicans to highlight problems with Colorado's individual insurance market.

This legislation also comes during a time of great uncertainty about the future of the federal exchange as Republicans in Washington, D.C., plan to repeal the Affordable Care Act. The ACA created the exchanges, required people to buy insurance if their employer didn't offer it and offered substantial subsidies to many people in the market. It's not clear what the replacement will look like and whether there will continue to an exchange.

Joe Hanel, a spokesman for the independent Colorado Health Institute, said one of the primary benefits of the exchange -- state or federal -- is that it lets people compare coverage and pricing in a single place with a lot more transparency than existed before.

Before the ACA created the exchanges, "you were comparing apples and oranges and bananas and pineapples and pomegranates," he said.

As for the benefits of Colorado having its own exchange, it means Colorado can do enrollment outreach in the ways that make sense for Colorado, Hanel said.

"The exchange was set up to have more local control over the online insurance marketplace," he said. "That's really the main rationale for keeping it. With a local or state-based exchange, you can target your outreach through your local expertise to be more effective."

Getting rid of the exchange won't save consumers money compared to the federal exchange, healthcare.gov, because the fees charged on insurance policies to pay for the exchange are the same for both, 3.5 percent.

But that assumes the federal exchange continues to exist in its current form.

"If the federal exchange goes away and Colorado repeals Connect for Health before that, then you'd probably be dealing with a very different policy environment entirely," Hanel said. "It would depend a lot on what comes out of Congress. Would there be an individual mandate? Would there be a subsidy?"

One of the main reasons people buy insurance on the exchange, in addition to the convenience of comparing policies, is to get access to subsidies. This year, 62 percent of Connect for Health customers got financial assistance. The average was $371 per month per household to offset the cost of insurance premiums. If those subsidies go away, Hanel said, there's a possibility not enough people would use Connect for Health to cover the fixed costs of running the system.

Hanel said the problems reported in rural areas, like the counties with only a single insurance provider, and rising premiums in the individual market exist in states that don't have their own exchange as well as in states that do, like Colorado, and it's not at all clear that getting rid of the exchange would fix them.

A fiscal analysis of the bill by the Colorado Legislative Council staff found that getting rid of the exchange could actually cost the state money.

Insurance companies are currently claiming $5 million in tax credits for donations made to the exchange, and that would go away, resulting in a revenue increase. However, that increase would, in turn, be canceled out in the form of a TABOR refund. So that's a wash.

Additionally, the Department of Health Care Policy and Finance would need to spend around $3.6 million to make Colorado's system compatible with the federal system and transfer necessary information.

The state analysis was based on the current federal regulations because no one knows how the nation's health-insurance laws might change.

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