Jessica Seaman, The Denver Post
As the open-enrollment period approaches for Colorado’s health insurance exchange, officials and experts have a familiar message for consumers: shop around for better deals on coverage.
It’s not a new concept. But this year, shopping for health insurance could reduce consumers’ premiums by an average of 50 percent — and, in some cases, individuals with subsidies might even qualify for plans with zero monthly premiums, according to experts.
Some stability has seeped into the individual market — reflected in the moderate premium increases approved by state regulators earlier this month — and there are deals to be found, if individuals are willing to make some concessions.
“It’s important to shop around,” said Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative. “This year that’s even more important. The way that the rates have changed means that many consumers may be able to find a more affordable plan or better coverage for a similar price.”
One of the first things consumers will notice when open enrollment starts on Thursday is that monthly premiums for 2019 have, on average, increased at a smaller rate than previous years.
After years of double-digit hikes, the state Division of Insurance has approved just a 5.6-percent average increase in premiums on the individual market.
The single-digit increase alone will be a jolt to consumers. It’s the smallest increase in three years for health insurance policies on the individual market, which are sold both on and off the state’s health insurance exchange.
For example, in 2017 state regulators approved a 27-percent hike in individual insurance premiums. The increase rose to 32.2 percentafter President Donald Trump’s administration cut cost-sharing reduction payments to insurers.
Compared to last year, individuals “are going to see a lot of good bargains,” said Joe Hanel, managing director of communications for Colorado Health Institute.
About 250,000 Coloradans get their health insurance on the individual market. Of those, roughly 190,000 received insurance through Connect for Health Colorado, the state’s online exchange, in 2018.
The exchange was created in 2011 after the passage of the federal Affordable Care Act, also known as Obamacare. It provides health insurance for just a portion of the state’s residents.
Most Coloradans are covered through their employers, and others receive insurance through programs such as Medicaid and Medicare.
Open enrollment will run until Jan. 15. To have insurance coverage by the New Year, individuals must enroll by Dec. 15.
The key to finding cheaper premiums will be individuals’ willingness to switch plans and whether they qualify for subsidies. The threshold for financial assistance is $48,560 for individuals and $100,400 for a family of four. About 134,000 individuals qualified for financial assistance in 2018.
In some cases, people who switch to the lowest-cost plan available within their current coverage level could see premiums drop an average of 50 percent, according to Connect for Health Colorado.
But switching plans can come with a cost.
Plans with lower premiums sometimes carry larger deductibles, which are the costs individuals must pay before their insurance plan starts kicking in. Such plans can also come with out-of-pocket maximums.
But cheaper, yet similar, plans with a different insurance company can place an individual’s doctor out of network, meaning they would have to change providers to get coverage.
In deciding whether to switch to a plan with a cheaper premium and higher deductible, consumers should consider how often they go to the doctor. An individual who visits a doctor often might find that a more expensive plan is worth the cost in the long run, Hanel said.
This year, subsidies are going to be even more crucial than before thanks to a strategy called “silver-loading.”
Individuals with incomes low enough to qualify for tax credits will see, on average, a 24-percent drop in their net premium, according to Connect for Health Colorado.
Silver plans, which are second highest in quality, saw premiums increase at a higher rate than gold and bronze plans. Silver-plan premiums increased, on average, almost 12 percent, compared to 3.8 percent and less than 1 percent for gold and bronze plans, respectfully.
While the premiums have gone up for silver plans, it could work to the benefit of consumers because tax credits are based on the plans. When insurers pile their premium hikes into silver plans, as they have this year, federal subsidies increase for all plans.
This means some people with subsidies will be able to find deals on the higher-level gold plans. While others will be able to get a low-level bronze plan, which has higher co-pays and deductibles, for a monthly premium of zero dollars, Hanel said.
“It’s really worth seeing if you qualify for those tax credits,” he said.
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