Colorado estimates $411 million in savings on individual health insurance

In 2014, a sign posted on the 16th Street Mall invited people to sign up for health insurance through the Affordable Care Act.

Premiums for Coloradans who buy their insurance on the individual market will increase this year, but by a total of $411 million less than if the state had not taken steps to curb them, the Department of Insurance announced Monday. Colorado.

Some Coloradans who buy coverage in the individual market could see additional savings on their out-of-pocket insurance costs. Next year, people earning up to 250 percent of the federal poverty line — $75,000 for a family of four — will be eligible for lower deductibles and copayments. Previously, the threshold was 200% of the poverty line, or about $60,000 for four people.

The out-of-pocket spending reductions are available because the federal Centers for Medicare and Medicaid Services allowed Colorado to reallocate some of the money it saved. When premiums go down, the federal government doesn’t have to pay out as many tax credits to people who buy on the individual market.

Most of the projected 24% reduction in premiums that would have come from reinsurance, which essentially acts as a partial safety net, limiting what insurers have to pay out to their highest-needs customers. Because federal law requires companies to spend 80 percent of the monthly premiums they collect to pay for customer care, if they’re on the hook for less money, rates drop.

The Insurance Department’s review process, which determines whether companies can have the premium rates they requested, and the Colorado option accounted for about three percentage points of the 24 percent reduction. The Colorado Option is a standardized plan that was intended to reduce premiums by 10% this year.

Gov. Jared Polis said he was “thrilled” with the combined results.

“That’s why we have the process,” he said.

Most companies selling in the individual market got smaller increases than they asked for, although the difference was less than two percentage points. The exception is Denver Health Medical Plan, which requested a 7.8% increase but received more than double that.

Kate Harris, deputy insurance commissioner, said the department decided Denver Health’s plans needed higher rates to be sustainable, but found savings at other insurers.

“It’s really important that all their rates are appropriate,” she said.

Average individual market premium increases for 2024 will be:

  • Anthem: 12.7%
  • Cigna Health and Life Insurance Company: 7.1%
  • Denver Health Medical Plan: 19.6%
  • Kaiser Foundation Health Plan of Colorado: 10.5%
  • Rocky Mountain Health Care Organization: 6.5%

Select Health, which is affiliated with Intermountain Health, also joined the Colorado market for the first time. Intermountain, which is based in Utah, established itself in Colorado last year through a merger with SCL Health.

The Insurance Division estimated that average increases would be 30% or more without reinsurance. The biggest savings were on the Western Slope, where he estimated premiums would rise by more than 50%.

About a third of Colorado Option plans in the individual market met the goal of reducing premiums by 10%. These 25 plans are available in 15 counties, where about three-quarters of Coloradans live.

Harris said 73 contracts between insurers and hospitals were renegotiated to lower rates, contributing to lower premiums overall.

“Even if they’re not the 10 percent reduction that the 25 (plans) are, there are still savings that are being realized for Coloradans,” she said.

Last year, about 13 percent of people who bought insurance in the individual market chose Colorado Option plans. Polis said he thinks it could benefit the market as a whole by attracting more customers.

“People who are uninsured or who have had to buy some other option may find the exchange more attractive,” he said.

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