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CMS Approves Colorado Option

The Centers for Medicare & Medicaid Services on June 23 approved Colorado’s Section 1332 waiver application to create a state-based standard health benefit plan. Designed to reduce premiums, the Colorado Option will be offered on the state’s health insurance marketplace for the 2023 plan year.

The Colorado Option will cover all essential health benefits, including primary care, behavioral health, and prenatal visits, at no cost. It will combine standard health benefit plans, required premium reductions, and increased state subsidies for those both currently eligible and ineligible for federal subsidies, to make coverage more affordable.

The state’s waiver plan increases competition by establishing premium reduction targets for the Colorado Option, creating significant savings in premium tax credit costs for the federal government. These savings will be shared with the state in the form of pass-through funding to support the state’s reinsurance program and state-based subsidies. Additionally, the amended waiver extends Colorado’s existing state-based reinsurance waiver program through 2027.

Colorado projects that the Colorado Option will lower statewide premiums by up to 14 percent and increase marketplace enrollment by up to 10,000 individuals. The amended waiver is estimated to produce net federal savings of $214 million in 2023 and $1.618 billion during the five-year waiver period.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Julie Kozminski is a senior policy analyst at America's Essential Hospitals.

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