Coloradans who buy their health insurance on their own will see an average premium increase next year of nearly 27 percent, before taking federal tax credits into account.
The Colorado Division of Insurance announced Wednesday that it has given final approval to rates proposed by nine different insurers expecting to offer plans both on and off of the state’s insurance exchange in 2018. In some cases, regulators knocked back the originally proposed rates — such as with Cigna, where regulators and the company negotiated to drop the proposed increase from above 40 percent down to about 31 percent. In other instances, regulators urged carriers to raise their rates higher, fearing that the low-ball proposals weren’t sustainable.
The final statewide average increase — 26.7 percent — is identical to the average proposed statewide increase when insurers first filed their plans earlier this summer. Breakdowns of rate increases by county are expected to come later this month.
Although state insurance commissioner Marguerite Salazar said regulators had hoped this would be “a year of stability” as insurers found their footing, the final approved rate increases exceed the 20 percent jump approved last year. Salazar said insurers told regulators that the ongoing debate over whether to repeal the Affordable Care Act — and, essentially, change the rules for the individual market only a few years after the rules were first rewritten by the law, also known as Obamacare — led in part to the price increases. Insurers also cited more general market conditions in filings with the state justifying the proposed premiums.
“It was a struggle,” Salazar said. “Markets don’t like uncertainty, bottom line.”
The rate increases apply only to people who buy insurance on their own. That group represents about 8 percent of the state. Slightly more than half of Coloradans receive health insurance through an employer, while the remaining insured Coloradans have government-provided coverage.
The increases also don’t reflect what many people in the individual market will actually pay for insurance. Nearly two-thirds of people who shop for insurance on the state’s Obamacare exchange, Connect for Health Colorado, are eligible to receive tax credits to help pay for premiums. Those credits rise as premium prices do, meaning they often work to bring down effective premium increases. For instance, in 2016, according to a federal report, people nationally who received tax credits to buy insurance saw an increase of $4 per month in what they paid, after taking the credits into account, even as the nominal price of plans increased by $30 a month.
But the individual market is also closely watched because of its connection to Affordable Care Act rules — making annual changes in premiums and plan offerings something like a heart monitor for the law’s health.
Colorado U.S. Rep. Scott Tipton, a Republican, reacted to the approved rate increases on Twitter by calling on Congress to repeal the Affordable Care Act.
(1/2) Colorado Division of Insurance just announced average increase of 26.7% for 2018 premiums in individual health insurance market.
— Rep. Scott Tipton (@RepTipton) September 6, 2017
(2/2) The Senate must act to repeal & replace Obamacare, provide relief from skyrocketing premiums https://t.co/uh3kwi2Hhv
— Rep. Scott Tipton (@RepTipton) September 6, 2017
U.S. Rep. Mike Coffman, also a Republican, reacted similarly, saying the premium increases show that the Affordable Care Act is “structurally unworkable.”
“Congress cannot give up on health care reform,” he said in a statement.
Republican U.S. Sen. Cory Gardner likewise pinned blame on the Affordable Care Act.
“Our current health care system will continue to fail Coloradans if we don’t do something to address the rising costs created by the Affordable Care Act,” Gardner said in a statement. “This should not be OK. It should not be accepted as normal that just like previous years, health care insurance costs will continue to go up on thousands of Coloradans next year.”
Gardner pledged to work on a bipartisan solution to the annual premium increases.
U.S. Sen. Michael Bennet, a Democrat, also looked to a bipartisan fix, when he noted on Twitter before the rates were announced that he was participating in hearings Wednesday in the hopes of lowering prices.
Heading to our first bipartisan #healthcare hearing in the HELP Committee. Ready to work to find ways to lower costs for Coloradans.
— Michael Bennet (@SenatorBennet) September 6, 2017
Meanwhile, Adam Fox, a spokesman for the liberal Colorado Consumer Health Initiative, said GOP-led repeal efforts had caused the price jumps.
“The irresponsibility of this Administration and Republicans in attacking the stability of our health coverage systems is simply astounding,” Fox said in a statement.
For 2018, Colorado will have seven insurers selling plans on Connect for Health Colorado. Two more insurers will offer plans off the exchange, which means they won’t be eligible for tax credits. The average increases range from a 30.9 percent jump for Cigna plans to an 11.5 percent increase for plans by Rocky Mountain Health Plans, which covers only Mesa County.
Cigna had originally asked for a 41.2 percent increase but later backed down, Salazar said.
“We did not see that it really met all of our standards,” Salazar said of Cigna’s original proposal. “So we sat down with them and negotiated it down.”
Insurance regulators, though, pushed for a higher increase from insurance startup Bright Health, which originally proposed a 15 percent increase but was ultimately approved for a 27.4 percent rise. Salazar said regulators were worried that too-low prices would send people flocking to Bright’s plans and overwhelm the carrier’s ability to absorb potential losses.
“We were concerned about solvency with the rates they were putting forth,” she said.
Anthem, the only carrier offering a plan in the exchange in 14 Colorado counties, was approved for a 30.2 percent increase, identical to what it proposed.
Open enrollment for 2018 individual plans runs Nov. 1 through Jan. 12.
The approved premium increases for plans sold on Connect for Health Colorado are:
- Anthem: 30.2 percent
- Bright Health: 27.4 percent
- Cigna: 30.9 percent
- Denver Health Medical Plan: 12.7 percent
- Friday Health Plans (formerly Colorado Choice): 29.7 percent
- Kaiser Permanente: 24.4 percent
- Rocky Mountain Health Plans: 11.5 percent
The approved premium increases for plans sold off of the exchange are:
- Anthem: 33.5 percent
- Freedom Life Insurance Company of America: 27.1 percent
