Colorado lawmakers’ latest plan to slash health insurance prices could risk billions in federal funding

To work, the major bill on reinsurance will now likely need to find funding that doesn’t come from hospitals

Colorado lawmakers’ latest plan to reduce health insurance prices has hit a major snag: If it passes, the state could potentially lose out on more than $2 billion annually that it currently receives, including more than $1 billion a year in Medicaid money from the federal government.

The problem has to do with how lawmakers plan to pay for their ambitious “reinsurance” program, which would lower insurance premiums for people in the individual market by helping insurance companies pay their highest-cost claims. As it’s currently structured, the money would come from hospitals, which would be required to put up $500 million over a five-year period.

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