The monthly cost to buy health insurance from the state’s individual marketplace is expected to rise about 11.3% in 2023, though the “Colorado Option” may offer a lower-priced alternative.
The Colorado Division of Insurance released preliminary information Tuesday about the 399 plans that will be available through Connect for Health Colorado, the state-run marketplace. The rates won’t be finalized until mid-October.
The overall rates don’t account for any subsidies that buyers receive based on their income. It’s not clear if Congress will extend larger subsidies for marketplace plans before open enrollment starts in November. Connect for Health Colorado CEO Kevin Patterson estimated the extra subsidies lowered premiums about 16% for new enrollees.
The Colorado Option isn’t a true public option, in the sense that the state itself isn’t running the insurance plan. The state did set a standard plan design, however, and mandated that some primary care and mental health services be provided with no out-of-pocket cost. Insurers are offering 42 plans that fit within that design.
The law that creates the Colorado Option requires it to lower premiums by 5% from their 2021 levels in 2023, with further reductions in the next two years.
The Division of Insurance estimated about 87% of Colorado residents live in an area with at least one Colorado Option plan that met the 5% goal available for purchase. It’s possible some others may also have a plan that meets the benchmark, but the division is still reviewing the rate filings.
In all counties, there’s a silver Colorado Option plan that’s cheaper than average for the area, Colorado Insurance Commissioner Michael Conway said. That’s also the case for bronze plans in 62 counties and gold plans in 58 counties, he said. (The metal level gives a rough idea of how a plan is structured, with gold plans requiring higher premiums, but lower out-of-pocket costs if you get sick, and bronze plans taking the opposite approach.)
“We’re increasing competition,” he said.
The Colorado Consumer Health Initiative described the proposed rates as concerning, and noted premium increases will be larger for residents of the Eastern Plains and Western Slope.
“Even as reinsurance keeps premiums for Coloradans down, and as we see more companies offer plans in more counties, health insurance continues to be unaffordable for too many Coloradans,” Mannat Singh, the initiative’s executive director, said in a statement. “Premium rates must be reasonable and justified; the industry shouldn’t use the ongoing pandemic or inflation to hike company profits.”
At this point, the division isn’t expecting any network standoffs, though it’s still reviewing the filings, Conway said.
In 2021, some patients worried about being unable to see specialists who had treated them before when Anthem and UCHealth couldn’t agree on rates for marketplace plans in Denver. The insurer and the health system reached a deal to bring it back in-network in 2022, meaning patients didn’t face larger out-of-pocket costs if they wanted to see doctors employed there.
The insurance division estimated the price of premiums would have risen by closer to 34% if the Centers for Medicare and Medicaid Services hadn’t allowed Colorado to extend the reinsurance program through 2027. Reinsurance is essentially a backstop, limiting how much insurers have to pay for their sickest customers. With lower potential liability, they can set lower rates.
Monthly premiums in the small group market for businesses with no more than 100 employees are expected to rise about 9.2% next year. The division reported 11 companies are offering 497 small group insurance plans. Bright Health, which only had 951 enrollees in the small group market, is leaving that business but will keep selling individual plans.
Seven companies will offer individual plans in 2023: Anthem, Bright Health, Cigna Health, Denver Health, Friday Health, Kaiser Permanente and Rocky Mountain Health Plans. All counties but Jackson have two or more insurers selling plans.
“There aren’t a ton of folks out in Jackson County, so it’s not super-enticing from a competitive standpoint,” Conway said.
Oscar Health, which entered the Colorado marketplace in 2020, will pull out at the end of this year. The insurance division estimated it only enrolled about 3,800 people.
Jackie Kahn, chief communications officer for Oscar Health, said multiple factors drove the decision to leave, including regulatory changes and some factors related to the market itself.
“We intend to make this exit as seamless as possible, while continuing to provide service to the existing membership throughout this year,” she said in a statement.
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