DENVER | Colorado will begin charging an Obamacare tax next month on all health insurance policies — even those obtained through private employers — to help prop up the state’s struggling health care exchange.
The Connect for Health Colorado board voted 7 to 1 Monday to approve the fee as part of its $66.4 million budget for fiscal year 2015, more than double the $26 million budget that had been previously anticipated.
The Obamacare tax, which is expected to raise $13 million, infuriated Republicans, who were already aghast over the board’s decision last month to award a $14,291 bonus and 2.5 percent raise to exchange CEO Patty Fontneau.
Republican state Sen. Owen Hill called the tax an example of “government gone wild,” while state Rep. Dan Nordberg said the vote “provides a real glimpse of the dysfunction at Connect for Health Colorado.”
“They have no problem levying a tax on hundreds of thousands of Coloradans who don’t even participate in the exchange, but can’t provide transparency on the $100 million in public funds they’ve already received,” said Mr. Nordberg. “This is an organization screaming for accountability.”
The only board member to vote against the budget was Ellen Daehnick, who said she had doubts about the exchange’s ability to spend its money wisely.
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“I just don’t have any faith that we’re going to get value for our money,” Ms. Daehnick said in Health News Colorado. “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.”
Ms. Fontneau said in a press release Monday that the “diverse spending approach” was needed to help the exchange become self-sustaining after federal funding dries up at the end of the year. Connect for Health Colorado has received $177 million in federal grants to fund the rollout.
“Connect for Health Colorado’s goal is to maintain a conservative financial approach and keep fees low for Coloradans while continuing to meet our mission of providing access, affordability and choice,” Ms. Fontneau said.
Connect for Health Colorado spokeswoman Linda Kanamine said the fee would be charged to insurance companies, adding that, “It’s up to insurers whether to absorb it or pass it along.”
Supporting the fee was state Insurance Commissioner Marguerite Salazar, who argued Monday that the additional funding was needed to ensure the exchange’s viability.
“We’re still building this airplane,” said Ms. Salazar said in Health News Colorado. “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.”
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Four states — Maryland, Massachusetts, Nevada and Oregon — are weighing whether to join the federal exchange after seeing their programs collapse.
It didn’t take long for the Obamacare tax to become an issue in the Senate campaign. Republican Rep. Cory Gardner, who’s challenging Democratic Sen. Mark Udall’s re-election bid, denounced the tax and called on Mr. Udall to do the same.
“Taxes were raised by $13 million today on all Coloradans who purchase health insurance, but don’t expect to hear anything from Sen. Udall,” said Mr. Gardner in a statement. “Despite the fact that Obamacare would not be the law of the land without his vote, he continually refuses to speak up for Coloradans as their health insurance plans are canceled, their taxes are raised, and their premiums rise even higher.”
On his website, Mr. Udall calls the state health care exchange “pure Colorado common sense.”
More than 337,000 Coloradans have lost their insurance policies since last year’s the Obamacare rollout. The state’s health care exchange reports signing up about 135,000 individuals for private insurance, and another 159,000 on Medicaid.
At least 875,000 individuals are expected to be affected by the $1.25 per month fee under the exchange’s new budget, according to Health News Colorado.
Republicans have called the Obamacare tax unconstitutional, given that the state’s constitution requires voters to approve any tax increases, but exchange managers insist it’s a fee, not a tax.
In 2013, the Democrat-controlled state legislature passed a bill allowing Connect for Health Colorado to charge fees on policyholders through 2016. Earlier this year, state Democrats killed a bill sponsored by Mr. Nordberg to audit the health care exchange.
“They’re going to continue to nickel and dime us to death when we have a hurting economy and people are struggling,” said Mr. Hill. “Now they’re trying to take another $13 million from working Colorado families because they can’t get their act together and stay on budget.”
• Valerie Richardson can be reached at vrichardson@washingtontimes.com.
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