Colorado receives $116 million exchange grant

By Katie Kerwin McCrimmon

Colorado will get another $116 million to help launch the states new health exchange, Connect for Health Colorado.

Federal cuts known as sequestration chopped $9 million from the states $125 million request.

Last month, exchange CEO and Executive Director Patty Fontneau said that some programs may have to withstand higher cuts than others because managers already have signed contracts for services or technology so they cannot spread the cuts evenly across all programs.

Myung Oak Kim, director of communications and outreach for the exchange, said the cuts shouldnt impact customers.

The reduction in the grant due to the sequester will not impact our ability toopen the new health insurance marketplace and to serve Coloradans starting in October, Kim said in a written statement. We will review the budget and our financial obligations going forward and will work with the Board to identify ways to accommodate the reductions without impacting our ability to serve Coloradans.

Colorado has received two previous exchange implementation grants for $18 million and $43 million respectively. The newest grant from the U.S. Department of Health and Human Services will fund operations through the first year of the exchange in 2014 and technology enhancements through 2016.

In a statement about the grant award, Fontneau did not mention the cuts.

This grant will allow Connect for Health Colorado to open a user-friendly, web-based marketplace that lets individuals, families and small employers in Colorado compare and purchase health insurance plans, apply for new financial assistance to reduce costs and receive personalized service from a statewide network of customer service center representatives, health coverage guides and certified health insurance agents and brokers, Fontneau said in a prepared statement.

Among the major costs included in the $125 million request were:

  • $52 million for technology costs
  • $10 million for customer service center infrastructure
  • $13 million for customer service staffing
  • $8 million for back office staff to handle manual processing that IT programs cant yet do
  • $10.5 million for a customer assistance network
  • $15 million for marketing and outreach campaigns and consultants