Colorado: Preliminary avg. 2020 #ACA exchange premiums: 18.2% *decrease* with reinsurance, 0.5% increase without it

This just in via the Colorado Dept. of Insurance:

Polis Administration Projects 18.2% Average Decrease in Premiums for Individual Health Insurance Plans in 2020

Reducing health care costs has been a top priority for Polis.

DENVER (July 16, 2019) – Today, the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), announced that for the first time ever, Colorado health insurance companies that sell individual plans (for people who do not get their health insurance from an employer or government program) expect to reduce premiums by an average of 18.2 percent (-18.2%) over their 2019 premiums, provided the reinsurance program is approved by the federal government. These are the health insurance plans available on the Connect for Health Insurance Exchange, the state’s health exchange made possible by the Affordable Care Act (ACA).

“For the first time in the history of our state’s health exchange, premiums are dropping. Premiums in the individual market are projected to go down by 18.2 percent on average next year, and as much as 41 percent in some areas of the state, so long as the Federal government approves our bipartisan reinsurance program. Reducing health care costs for Colorado families has been a primary focus of my administration, and today we are seeing the first signs that our hard work is paying off,” said Colorado Governor Jared Polis. “The thousands of dollars people save can go to buying a home, saving for college or retirement, or whatever Coloradans want to do with it. I’m just thrilled to save people thousands of dollars on health care so they have more left to enjoy life. By saving families money and helping more Coloradans gain affordable, quality health care for their families, we can reduce costs across our health care system and continue our state’s strong economic growth.”

Colorado’s proposed reinsurance program -- a bipartisan policy that has produced double-digit premium reductions in other states -- is primarily responsible for these lower premiums. These decreases range from 10.3 percent (-10.3%) to 33.5 percent (-33.5%), all tallying to an average reduction of 18.2 percent (-18.2%) over 2019 individual premiums, across all plans, from all companies, across the state. Without the proposed reinsurance program, the companies’ requested premium changes would add up to an average increase of 0.5 percent (+0.5%). Find a description of the reinsurance program at the end of this release (“What is Reinsurance”).

That's an 18.7-point swing thanks to the ACA's 1332 reinsurance waiver provision which, I should note, has been a part of the ACA since it was signed by President Obama in 2010 and which has nothing to do with the Trump Administration other than them giving it their blessing.

“These decreases are why we worked so hard to pass the reinsurance program,” said Insurance Commissioner Michael Conway. “All of us -- the Governor, the DOI, the bill’s bi-partisan sponsors, and the consumers who testified in support of the bill -- knew that this would be the result for a program that has shown similar results in seven other states. This will make health insurance more affordable across Colorado, and it can be especially impactful in the higher cost areas in the mountains, Western Slope and Eastern Plains.”  

The information below on the companies, plans and requested premium changes is preliminary, and only reflects what the companies have requested, not the final approved plans for 2020. The final, approved plans for 2020 will be made available later this year in late summer / early fall. All of the preliminary 2020 facts and figures are available on the Division's webpage for Health Insurance Plan Filings. Colorado consumers can file formal comments on these plans through August 5.

All Companies Return, Plus One More

For the third year in a row -- 2018, 2019 and now 2020 -- the same seven companies are returning to offer on-exchange, individual plans: Anthem, Bright Health, Cigna Health and Life, Denver Health Medical Plans, Friday Health Plans, Kaiser Foundation of Colorado and Rocky Mountain HMO. And a new company -- Oscar Health -- is entering the market, showing that the state’s successful health exchange is growing stronger. Oscar is a technology-driven insurance company that over the last six years has offered plans in Arizona, California, Florida, Michigan, New Jersey, New York, Ohio, Tennessee and Texas. For 2020, Oscar will be offering individual plans in the Denver area. 

“Threats and uncertainty continue to plague the ACA at the federal level,” continued Commissioner Conway, “Yet, here in Colorado, we continue to maintain the stability in our ACA markets, which helped bring another insurer to our state.” 

View Plans  / Submit Comments

The plans and requested premiums from the insurance companies, also called filings, are available on the Division’s “Health Insurance Plan Filings” web page (click “Search Health Insurance Plan Filings” on that page). Note that these are very technical documents, so be prepared to spend some time on this process. There is a step-by-step video guide (also available as a downloadable print guide) to help you navigate to the filings that interest you, to demonstrate how to find particular information in those filings, and to show you how you can submit comments.

The Rate Review Process

The Division of Insurance will spend the summer reviewing these plans to make sure the requested premiums are appropriate, and ensuring that the plans comply with the ACA and state laws. Any requested premium changes must be justified by the insurance companies. 

  • The Division of Insurance does not set insurance premiums, but will review what the companies submitted to determine if the requested increases or decreases are justified.
  • The Division of Insurance checks to make sure the premiums are sufficient for the company to continue to pay its members’ claims.
  • The Division of Insurance verifies whether the plans meet the metal tier coverage levels:  bronze (an average of about 60 percent of medical expenses paid by the plan), silver (70 percent) and gold (80 percent).  
  • The Division of Insurance also reviews the benefits and the plans’ networks of healthcare providers to make sure that they meet state and federal requirements.   
  • The Division will release the final approved plans and premiums for 2019 in late summer / early fall, along with summary information and analysis.

What is Reinsurance?

House Bill 19-1168 (HB19-1168) passed this past legislative session, establishes a reinsurance program starting in 2020 for the individual health insurance market - the seven to eight percent of people in the state who do not get their health insurance through their employer or through a government program. Reinsurance works by paying a portion of high-cost claims - such as those incurred after major accidents or due to serious health conditions. As insurance companies don’t have to pay that portion of the high-dollar claims, they can lower the premiums for individual health insurance plans.

As the reinsurance program brings health insurance premiums down, the amount of money the federal government has to spend on ACA tax credits will also go down. But rather than letting the federal government pocket the money, Colorado is asking the federal government to pass that money through to the state to fund the reinsurance program and maintain the lower premiums and stability it will bring to the individual health insurance market. The DOI submitted an application to the federal government to allow the pass through of that money in the spring and is awaiting approval of the program. If is approved, the DOI will be required to submit reports to the federal government on the effectiveness of the program. In addition, HB19-1168 directs the DOI to study the effects of the program after two years, in particular focusing on affordability and the impact to consumers eligible for ACA tax credits. For more information, visit the DOI’s “Reinsurance Program” webpage.