Colorado: Nearly 20,000 more Coloradans could reduce deductibles to as low as $100!

I debated how to word the headline for this blog post. On the one hand, the press release itself includes some important information and some genuinely good news re. cost savings for Colorado residents. On the other hand, I couldn't get past how hilariously misleading the headline itself is, so I decided to use the sublede instead.

Via the Colorado Department of Regulatory Agencies:

Gov. Polis and DOI Announce 80% of Health Insurers to Decrease Premium Requests for 2024 and Increases Reinsurance Savings to $411M for Colorado Consumers

• Nearly 20,000 more Coloradans could reduce deductibles to as low as $100.

DENVER - When it comes to health insurance, the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), makes sure that insurance companies are complying with the Affordable Care Act (ACA), as well as State law and our specific insurance regulations. Today, Governor Polis and the Division of Insurance announced 80% of health insurers will decrease premium requests for 2024.

The rate review authority allows DOI to review the premiums the companies want to charge people for their plans. As a result of this authority, 80% of insurance companies that will offer individual market plans in 2024 decreased their initial premium requests, bringing down premium increases for consumers by as much as 19% for some insurers. For the small group market, the DOI’s review made 66% of insurance companies decrease their initial premium requests. 

Don't get me wrong: Every sentence above is technically accurate: 80% of the carriers on the individual market and 66% of the carriers on the small group market in Colorado have had their preliminary rate increases reduced by state regulators.

Here's the thing, though: There's only 5 individual market carriers and 6 small group market carriers in Colorado for 2024. So yes, 4 of the 5 indy market carriers and 4 of the 6 small group carriers did indeed see their initial requests shaved down. The other 1 and 2 respectively had their requests approved as is or even increased. 

And yes, individual market carriers did i ndeed see their increases reduced by "as much as 19%." This refers to Rocky Mountain HMO, which had their rate hike drop from +8.0% to +6.5%...a reduction of the increase of 18.8%. However, again, the fifth carrier (Denver Health) saw its rate increase go up by 151%. And again, all five carriers are still increasing their premiums next year...just not by quite as much as they initially requested in most cases.

So what does this mean in real terms? The carriers asked for rate hikes with a weighted average of +9.7%...and were approved for rate hikes with a weighted average of +9.2%.

ASIDE from this Fun With Math® lesson, the rest of the press release is pretty much fine:

“I am thrilled to announce that Coloradans will save $411 million on health insurance premiums next year. I am committed to looking at every solution to save people money on health care to ensure that Coloradans can access quality care when they need it most,” said Governor Polis. 

Additionally, the rate review process led to even greater reductions in premiums through the Reinsurance Program. Based on the initial filings, the Reinsurance Program was estimated to reduce premiums by 21%. That was increased to 24.4% after the rate review process - meaning that without the Reinsurance Program, premiums would be 24.4% higher in the individual market in 2024. Translated into dollars, this will be $411.2 million Colorado consumers won’t have to spend on insurance premiums.

Regular readers know I have some serious concerns about how much net good state-based reinsurance programs actually do in a world where the subsidy cliff doesn't exist (ie, until the ARPA/IRA subsidies expire), but since those are scheduled to sunset at the end of 2025, I'll let this one pass.

But the DOI has a new regulatory instrument in the toolbox, and that was the hearing process for Colorado Option plans. This process led to more negotiations between insurance companies and hospitals to ensure the companies are lowering premiums on the Colorado Option plans. 

“The Division continues to hammer away at health care costs, working to limit rising costs and save people money on health care,” said Colorado Insurance Commissioner Michael Conway. “As it does every year, our team dug deep into what the companies filed to push down on what they wanted to charge. And the Colorado Option hearing process did something that is nearly unprecedented in health care in the U.S. - the Colorado Option actually bent the cost curve and reduced health care costs, and in turn brought down premiums.”

Colorado Option 
The Division implemented a public hearing process, for the first time, for the 2024 plans. The overall process of the Colorado Option, including the hearings that the Division held, led to 73 contracts between insurance companies and hospitals being reduced to the maximum allowed under law (either 20% lower than the reimbursement rate in 2023 or to the floor reimbursement rate set in law). 

For 2024, there will be 25 Colorado Option individual market plans across all metal levels that meet the target of a 10% reduction in premiums as compared to the 2021 plans, while 24 plans in the small group market met the target. However, with the regulatory tool of the public hearing process now available to the DOI for reviewing plans (it was not available for reviewing the 2023 plans), it is important to note what the target means in this new context. The target, set in advance of the companies filing their Colorado Option plans with the DOI, sets the trigger for the Commissioner of Insurance to use his authority to initiate public hearings. The targets and hearings incentivize insurance companies to negotiate lower reimbursement rates with the hospitals, and then pass those savings on to consumers in the form of lower premiums. 

The individual market is for people who do not get their health insurance from an employer or a government program like Medicaid or Medicare. The small group market is for small businesses with less than 100 employees. 

Individual Market, Finding Savings & Help Paying for Health Insurance
Many Coloradans currently receiving financial assistance through Connect for Health Colorado may see no change or even a decrease to their premiums, when their assistance for 2024 coverage is calculated. And with this assistance, many Connect for Health Colorado enrollees will find low premiums, in some cases under $100 per month. 

Additionally, for 2024, nearly 20,000 Coloradans will be newly eligible for reduced deductibles and other out-of-pocket costs like co-payments and coinsurance when enrolling in a Silver level plan through Connect for Health Colorado. Eligible Coloradans - people making up to $36,450 for an individual or $75,000 for a family of four - will be able to shop for Silver level plans with deductibles as low as $100. 

Even people who don’t qualify for financial assistance can find ways to save. For example, people not currently enrolled in a Colorado Option plan can limit premium increases to only 7%, on average, if they enroll in the lowest-cost Colorado Option plan available, blunting the overall average increase in premiums of 9.7% across all individual plans. And they will have the added bonus of enrolling in a plan that offers high value and lower out-of-pocket costs, with $0 doctor visits when sick or injured, $0 mental/behavioral health visits, $0 maternity care doctor visits (before and after birth) and $0 for many diabetic supplies. 

With the variety of plans for 2024, and all of the available financial assistance, it is important that Colorado consumers take the time to shop and compare the individual health insurance plans available for 2024, as well as determine what, and how much, assistance would be available. Remember, the expanded eligibility for assistance available that was created by the Inflation Reduction Act is still in place, so if it’s been some time since you checked what assistance you might qualify for, it is time to check again at the Connect for Health Colorado’s Quick Cost and Plan Finder Tool.

Small Group Health Plans
The small group market, which provides health insurance plans for employers with less than 100 employees, will see an average premium increase across all plans, across the state, of 8%. For 2024, there will be 371 health plans available to small employers. And much like the individual market, the DOI’s rate review authority made 66% of the companies pull down their initial premium increases by as much as 27% for some companies. 

Open Enrollment Starts Nov. 1 - Don’t Wait
Even though open enrollment doesn’t start until November 1, we encourage everyone to start looking at the health insurance plans available for 2024 and determining what financial assistance is available. At Connect for Health Colorado’s Quick Cost and Plan Finder Tool, the 2024 plans, premiums and financial assistance details will be available to view starting on October 24. 

Open enrollment for 2024 individual health insurance lasts until January 15, 2024. People enrolling November 1 - December 15, will have their coverage start on January 1, 2024. For those that wait to enroll between December 16 and January 15, coverage will start on February 1, 2024. 

Tables and information about the 2024 health insurance plans and premiums broken down by company, region and county can be found on the DOI’s “Insurance Plan Filings & Approved Plans” website, in the section “Details on Health Plan Filings & Approved Plans.” Consumers who have questions about their current plans should contact their insurance company, Connect for Health Colorado, their insurance broker, their employer or the Division of Insurance (303-894-7490 / DORA_Insurance@state.co.us).