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Colorado: 2015 ACA exchange premiums to only go up 0.20% on weighted average!

Hat Tip To: 
Daniel H.

At first glance, my headline above might seem to have a typo; according to the story itself, the actual increase is a whopping...1.18%, nearly a full percent higher! Busted, right?

Health insurance premiums next year will increase only about 1.18 percent on average statewide next year.

That’s according to the Colorado Division of Insurance after it reviewed and approved 1,072 health insurance plans from 20 carriers that will offer health coverage to consumers and small businesses next year.

However, when I read the actual report from the Colorado Insurance Division, it's even better than that:

On average statewide, plan premiums will increase 1.18 percent over 2014, although premiums vary by carrier, age and geographic area. Premiums also vary by plan type - known as bronze, silver, gold or platinum plan types. For individual plans, the statewide average increase is 0.71 percent, and for small group plans, the average increase is 2.54 percent. It is important to note however, that these are averages, and consumers should look carefully at the specific details for plans available in their area.

Here's the thing, though: Less than 2,500 people were actually enrolled in one of Colorado's ACA SHOP plans as of last month anyway. Frankly, very few people even know that the SHOP program exists (in part because the technical issues at Healthcare.Gov and some of the state-run exchanges meant that the SHOP exchanges weren't even operational in more than a handful of states, although they should all be online come November).

Since the primary focus of this site has been the individual QHP market, and there's so few people impacted by the SHOP premium changes, it seems reasonable to me to highlight the individual policy rate changes, which are 0.71% on weighted average.

But wait, there's more!

When you look closely at the premium increase summary, you'll notice something else: Even that 0.71% is a combination of ACA exchange and off-exchange policies!

That's right: EXCHANGE-based QHPs are only going up a weighted average of 0.20%, while off-exchange policies are going up by 2.4%.

However, if anyone really feels I should go with the combined individual/SHOP number, go for it: 1.18%. Horrifying!!

BUT WAIT, THERE'S EVEN MORE!!

OK, this is kind of a minor issue, but long-time readers know that one of the more frustrating data points that I was chasing after throughout the open enrollment period was the mysterious "Off-Exchange QHP" numbers, which have been difficult to hunt down. I eventually gathered plenty of evidence that the total off-exchange QHP total is roughly 8 million people (slightly higher than the fully-enrolled exchange-based QHP tally), but breaking it out by state has been next to impossible, and I never had any data specific to Colorado before.

However, thanks to the reports linked to above, a little simple algebra gives me the answer:

  • Exchange based QHPs are going up by 0.20% on average
  • OFF-Exchange QHPs are going up by 2.4% on average (Colorado is not one of the states which allowed non-ACA compliant policies to be grandfathered for an extra year, so every individual policy enrolled in as of now should be a Qualified Health Plan, or QHP)
  • The blended average of the two is 0.71%
  • In order to achieve that blended percentage, the ratio of exchange based to off-exchange in CO has to be roughly 77/23:
    • 0.77 x 0.002 = 0.00154
    • 0.23 x 0.024 = 0.00552
    • Add them together and you get 0.00706, or 0.71%
  • Since the most-recent exchange-based QHP tally was 143.5K as of the end of July, that means that the off-exchange total should be roughly:
    • 143.5 / X = 77 / 23(143.5 x 23 / X) = 77
    • (3300.5 / X) = 77
    • 3300.5 = 77X
    • (3300.5 / 77) = X
    • X = 42.9
  • ...42,900 OFF-Exchange QHPs in Colorado.