DATE: Thurs., July 20, 2023
CONTACT: Adam Fox, 303-563-9108, firstname.lastname@example.org
Katie Reinisch, 303-653-1009, email@example.com
Proposed Health Insurance Rates Increase, But Picture is Incomplete Without New Colorado Option Savings Included, Consumer Advocates Say
DENVER – Today, Colorado’s health insurance companies proposed average premium increases of 11% as released by the Division of Insurance.
The Colorado Consumer Health Initiative expressed frustration that yet again, consumers will be hit by insurance carriers jacking up prices rather than cutting or controlling costs. While the preliminary rate filings show Colorado Option plan premiums increases are being kept lower, at an average of 7.7%, these initial rates do not reflect savings garnered through the public hearing process in June. Those savings must be verified and used to lower premiums for the Colorado Option plans. This should make Colorado Option plans more competitive and cheaper in the market, while providing higher value benefits. In initial filings, Denver Health is fully meeting the premium reductions, and Cigna is meeting the targets on at least all of their silver level plans, showing it is achievable for insurance carriers.
Recent agreements made between insurers and hospitals to lower costs and get more Colorado Option plans closer to the premium reduction targets will have to be accounted for during the rate review process in the coming months. Due to pressure provided by public scrutiny and actions by the Division of Insurance (DOI) during the hearing process, insurers and hospitals reached some agreements to reduce costs, which should lead to more insurers achieving or getting closer to the 10% reductions in premiums, adjusted for inflation, required by the 2021 Colorado Option law. The proposed rates will require adjustments by the DOI and the carriers, and non-Option plans will also be scrutinized to ensure consumers are not being taken advantage of with unfair assumptions and rates. Given that preliminary rates for non-Option plans are increasing 30% more than Colorado Option plans, it appears carriers have not made efforts to negotiate better rates with hospitals or lower costs on non-Option plans.
“While we’re disappointed with the significant overall increase in proposed insurance rates, we know there is work being done to verify that savings negotiated through the hearing process are passed on through more affordable Colorado Option rates,” said Adam Fox, deputy director of the Colorado Consumer Health Initiative. “Based on the proposed rates and what we saw during the public hearing process, the Colorado Option is increasing competition and accountability in the marketplace and ensuring that consumer savings can be found, even when insurers and hospitals attempt to avoid scrutiny. We hope and expect that after public input on these proposals, the DOI and carriers will make significant adjustments to reach the targets. We will likely have to wait until the final rates are released in the fall to fully capture the savings that will be passed on to consumers.”
In its first year, 27,000 people – 13% of the individual market – enrolled in Colorado Option plans through Connect for Health Colorado. Another 10,000 signed up via the OmniSalud program to cover individuals left out of the Affordable Care Act, including Coloradans without documentation. These plans are popular and are an effective tool for increasing competition in the marketplace. Colorado Option plans also provide better value for most consumers, with more benefits covered without cost-sharing, like primary, behavioral, and perinatal care and a plan designed to address racial and health disparities.
In its first year, the standardized Colorado Option plans have increased competition in the market, allowing consumers to compare apples-to-apples plans across insurers with standardized benefits. In almost all counties, the Colorado Option plans are cheaper than the average premiums for non-Colorado Option plans. As insurers have to provide premium reductions on these plans, these plans will provide more affordable coverage and rates that are predictable for consumers.
Colorado’s health insurance rates continue to benefit from the state’s reinsurance program. Reinsurance has been providing significant support in keeping insurance rates lower than they would be without it. The DOI estimates that without reinsurance, premiums would be 21% higher on average.
The rate filings do present some good news for consumers, particularly after the announcement of Friday Health Plans of Colorado’s liquidation: PEAK Health Alliance will be back in operation with plans in partnership with Denver Health and the entrance of SelectHealth in the market will provide more options to Coloradans for their health insurance.
Colorado Consumer Health Initiative is a nonpartisan, nonprofit, membership-based group advocating for equitable access to high-quality, affordable health care. CCHI serves Coloradans whose access to health care and financial security are compromised by structural barriers, affordability, poor benefits, or unfair business practices of the health care industry.