Premiums could spike
State health insurers aim for an average of a 27 percent increase.
Colorado health insurers are asking to charge customers in the individual market nearly 27 percent more on average in premiums next year, the state Division of Insurance announced Friday.
The division must still review and approve the requests — after receiving public comment. But insurers can back out of the market if the state doesn’t OK their premium hikes.
Colorado Insurance Commissioner Marguerite Salazar said in a statement that the large proposed increases were not a surprise.
“I believe that the dubious situation at the federal level has contributed to the premium increase requests we’ve seen from the companies,” she said.
In a later interview, Salazar said she has heard insurers and other insurance commissioners refer to the instability as the “Trump Factor” that every insurer is pricing into its plans.
“The carriers just don’t know what’s going to happen,” she said.
In filings with the state, though, insurers cited multiple reasons for the increases.
Cigna, which is requesting the largest rate increase at 41 percent, said Colorado’s market turned out to be “more adverse than assumed in the current rates,” meaning it had cost more for the company to provide coverage than expected. Rocky Mountain Health Plans, which operates only in Mesa County and is requesting the smallest increase at 12 percent, said it flat-out lost money in prior years.
“The financial experience of the
product was worse than expected,” the company wrote in its filing.
But other plans nodded toward changing federal regulations and the tumult they could bring. For instance, Colorado Choice Health Plans said it is concerned the Trump administration will weaken enforcement of the so-called individual mandate, the law that everybody must have health insurance. If that happens, healthy people might abandon the market, leaving insurers covering a smaller pool of sicker people.
The increases would not apply to people who get coverage through their employers — as about 51 percent of Coloradans do. Instead, they would only hit people who buy health insurance plans on their own. Tax credits, which rise under current law as the cost of plans rises, could also take some of the sting out of the proposed increases.
The new rates would especially impact rural areas, where insurance is already costly.
Anthem, which is the only carrier offering plans that comply with the Affordable Care Act in 14 western Colorado counties, is requesting increases above 30 percent. Colorado Choice Health Plans, which is the only insurer besides Anthem offering plans in several southern and eastern Colorado counties, is seeking increases of nearly 29 percent.
Meanwhile, plans that focus their offerings on the Front Range asked for lower premium increases — including 24 percent from Kaiser Permanente and 15 percent from startup carrier Bright Health.
No more than 8 percent of people in the state shop for health insurance plans in the individual market, though that still accounts for hundreds of thousands of people.
But prices in the individual market have taken on outsized political significance in debates over the Affordable Care Act, also known as Obamacare, because they are one of that law’s most visible measurements of success or failure.
As such, the 2018 premium prices have been the subject of anticipation — and worry — for months. Colorado U.S. Sen. Cory Gardner, a Republican, has blamed the Affordable Care Act for increases in premiums. Salazar, who was appointed by Democratic Gov. John Hickenlooper, said earlier this year that Republican health care maneuvering at the federal level could cause massive premium spikes.
Last year, Colorado saw premium increases of an average of 20 percent in the individual market.
So far this year, insurers in states across the country have asked for big premium price increases in 2018.
An issue brief published this week by the American Academy of Actuaries cites two factors in premium increases across the country, and neither has to do with the Affordable Care Act, also known as the ACA. First is the increase in health care costs. Second is the uncertainty brought about by the Republicans’ still-being-debated health care bills.
“In the last several years, insurers have gained much more information about ACA plan enrollees, costs, and the operation of the current market rules, while uncertainties surrounding the future of those rules have become more pronounced,” Cori Uccello, a senior health fellow at the academy, said in a statement.
A federal report released last month gave Colorado’s insurance market the lowest risk score in the country, a sign, health analysts said, that the underlying market is stable and not collapsing.
For 2018, there are seven insurers proposing to sell individual plans, “on exchange.” That means the plans will comply with ACA regulations, they will be eligible for federal tax credits to help pay for premiums, and they will be available for purchase on Connect for Health Colorado.
Nine insurers are offering to sell individual plans “offexchange” that aren’t eligible for tax credits. The 27 percent average proposed cost increase includes plans both on and off the exchange.
The “small-group market,” where small employers can buy health insurance plans for their workers, is expected to be more stable in 2018. Insurers in that market requested a roughly 7 percent average increase in premiums. Salazar said that market tends to cover healthier people but is also somewhat less susceptible to the ups and downs of the federal health debate.