Next year, health insurance premiums will increase by nearly 10% for people who buy their own insurance.
But that’s slightly less than what insurers initially asked for, and the city-state government found other reasons to cheer in data released on Monday.
Nearly one-third of Colorado option plans are sold in the individual market and 80 percent of Colorado option plans are offered in the small-group market (where small employers purchase plans for their employees) and are expected to meet state-set price goals.
Those numbers are far better than they were when insurers submitted rate requests earlier this year and questioned the sustainability of the Colorado option, which was designed to provide better coverage at a cheaper price. The plan is one of Gov. Jared Polis’ signature health care policies.
“The Department continues to work hard to control health care costs, working to limit rising costs and save people money on health care,” Colorado Insurance Commissioner Michael Conway said in a statement. “As in previous years, our team took a deep look at these Documents submitted by companies to lower the charges they want.”
Others were less enthusiastic. Saskia Young, executive director of the Colorado Association of Health Plans, an insurance industry group that has often been at odds with Conway, noted that fewer plans will be offered overall next year and said the premium increases are partly due to new Underwriting requirements, the Insurance Division won the championship.
“DOI is laying out its legal obligation to ensure that premiums are not ‘excessive, inadequate or discriminatory’ as a new win for Colorado consumers, when in reality the same premium application process occurs every year,” Young said in a statement expressed in this report. statement.
The rates announced Monday apply to only a small group of consumers. About half of Coloradans have health insurance through work, but most are covered by large groups or self-funded plans. Meanwhile, only about 7% of Coloradans buy insurance on the individual market, where consumers buy coverage without help from their employer.
However, because the individual market is the most transparent health insurance market and the most regulated, it tends to receive the most attention and serves as a benchmark for other insurance markets.
New subsidies introduced
A unique feature of the individual market is that federal and state governments offer subsidies to help some people buy these plans, and these subsidies are often more expensive than the coverage employees pay through their jobs.
On Monday, the City of Polis announced that the state will be able to provide additional subsidies to low-income people next year. The subsidies are part of the federal government’s decision to provide the state with more than $200 million in “pass-through funding” in 2024 – funding that recognizes projects in Colorado that have lowered federal spending by the state. Premium subsidies.
The new subsidies will be available through the Silver Level program to individuals and families at 250 percent of the federal poverty level, which is $36,450 per year for an individual and $75,000 per year for a family of four. The state estimates about 20,000 people will be eligible for the new subsidies.
The most powerful price-cutting program remains reinsurance, in which the state helps insurers pay the most expensive claims, allowing the companies to lower premiums for everyone. The Insurance Division estimates that reinsurance will save consumers $411 million by 2024. Without the program, the state said premium prices would rise nearly 25% in 2024.
“I’m pleased to announce that Coloradans will save $411 million on health insurance premiums next year thanks to the bipartisan reinsurance plan,” Polis said in a statement. “I am committed to finding solutions to save people money on their health insurance premiums next year.” health care dollars to ensure Coloradans have access to quality care when they need it most.”
Colorado options rally
The average rate increase for individual market insurance plans next year is 9.7%, just shy of the average 10% increase initially requested by insurance companies. But most insurers found state regulators reduced their required premium increases by more. The state’s insistence on a sharp rate increase from Denver Health Medical Plan insurers wiped out much of the savings from price cuts by other insurers.
Interest rates rose 10.4% last year.
The Department of Insurance said people who are not currently enrolled in a Colorado Option plan will be able to limit price increases to 7% if they switch to the lowest-cost plan available to them next year. (To be sure, though, the Colorado Option plan may not be the lowest-cost plan available to people, which means the savings may be greater, which is why insurance departments often encourage people to shop aggressively every year and not let their money go Plan automatically renews.)
For Conway, this represents a major victory for Colorado option plans, even though most plans in the individual market are unable to meet their price targets of 10% below 2021 rates after adjusting for inflation. He credits the Colorado Option Plan with the public hearing process — even though the public hearing itself failed.
Conway said the threat of public hearings led insurance companies and hospitals to lower 73 different contracts to the fullest extent allowed by law, lowering rates for many Colorado Option plans below what was originally requested.
“The Colorado Option hearings are almost unprecedented in American health care,” Conway said in a statement. “The Colorado Option actually bends the cost curve and lowers health care costs, which in turn lowers premiums.”
Young, the leader of the Colorado Association of Health Plans, reiterated concerns that Colorado Option requirements are unsustainable.
“The Colorado Option Plan requires additional coverage at a lower price, which is not how the insurance or any other industry works,” she said.
Open registration for the individual market begins on November 1st. People who want coverage beginning January 1, 2024 will need to select a plan by December 15. The open registration window will close to everyone on January 15, 2024.