People in Colorado with pre-existing medical conditions were told by Gov. Bill Ritter this week  that they will now be able to purchase health insurance through the state–at the same rates as healthy people— if they are among the first 4,000 people to qualify and apply for the coverage.

The health insurance program is paid for both by premiums–which range from as little as $120 per month for a nonsmoker under 18, to $806 a month for a 64-year-old smoker–and by a $90 million subsidy from the federal government. The subsidy is intended to cover the difference between the premiums paid by individuals and the actual cost of coverage for those with pre-existing conditions.

To qualify for the program an individual must have a pre-existing medical condition, must have been denied coverage for that condition, and must have been uninsured for at least six months.  The federal subsidy is a portion of some $5 billion allocated nationally under the Patient Protection and Affordability Act of 2010. The program is intended to help bridge the gap until 2014, when private health insurance companies will be required to provide coverage to those with pre-existing conditions.

Ritter said that the program will provide much-needed relief for Coloradans who are currently deemed too costly to insure.

“Colorado is proud to announce this first and important step in national health care reform,” said Ritter. “This plan will offer tremendous relief to thousands of our citizens who have struggled to find affordable health insurance.”

House Republican Rep. Cindy Acree, of Aurora, said today that she applauds people being able to purchase health insurance  but has reservations about whether the program truly addresses the problem of hard-to-insure individuals. And she questioned the sustainability of the program given that it requires a federal subsidy to keep it afloat.

“My biggest concern with the state’s approach, while I do think it’s important that we address health care reform, is that we will eventually need state money to subsidize it,” said Acree.  “We need to stick with free-market solutions, such as allowing people to shop for plans across state lines that give people more options.  When the state option is the only option—a single-payer system—there are no options.”

The program, Getting US Covered, will be administered by Rocky Mountain Health Plans, a Colorado-based nonprofit headquartered in Grand Junction, and in partnership with Cover Colorado, under a contract with the federal Department of Health and Human Services.