For the first time since Colorado started its health insurance exchange, the prices people pay for coverage are expected to drop — by a statewide average of 18.2% — next year if the federal government approves a new state program called reinsurance.

For families on the Western Slope, who pay some of the highest insurance premiums in the country, the savings is expected to be nearly $9,000 a year. The Colorado Division of Insurance projects the average savings for Pueblo County at $6,696 annually and $3,369 for metro area residents.

“I mean, that’s just transformational in terms of saving families money,” Gov. Jared Polis said at a press conference Tuesday.

Reinsurance is basically a pool of $260 million in state and federal money that Colorado plans to use in 2020 to help cover some of the most expensive medical bills among the 250,000 people in the state’s individual market. The idea is that this alleviates some of the burden on insurance providers, which in turn lower their premiums.

Minnesota’s reinsurance program, for example, dropped its individual premiums by 11.3% and Alaska’s declined by 26%.

Colorado’s reinsurance program is still waiting on final approval from the federal government, but Colorado Insurance Commissioner Mike Conway said he’s all but certain that will happen this fall. Seven states already have federal waivers.

The final rates for 2020 health insurance premiums will be released in late September or October.

“We’ve been working on this for years … ,” said Sen. Bob Rankin, R-Carbondale. “But my caution on this is this doesn’t do anything to really lower the cost of health care.”

The news that insurance premiums on the exchange could see a double-digit drop received praise from both the Colorado Hospital Association and Colorado Consumer Health Initiative.

“We are pleased that the Insurance Commissioner is projecting a decrease in premiums on the individual market for 2020, as it reflects the many efforts by hospitals and providers to take ownership of their portion of the total cost of care,” said Steven Summer, president and chief executive officer of the hospital association, in a prepared statement.

The Consumer Health Initiative “expressed cautious optimism” at the expected drop in premiums while warning that if the Affordable Care Act — also known as Obamacare — is struck down in its latest legal challenge, it could “destabilize everything” by removing health insurance coverage for many Coloradans.

“We hope the federal Department of Health and Human Services will quickly approve Colorado’s reinsurance program, which is basically insurance for insurance companies that ultimately helps reduce insurance premiums for consumers,” said Adam Fox, director of strategic engagement, in a statement. “Without reinsurance, consumers will face average increases of 0.5 percent and continue to face very high premiums.”