Premiums for Coloradans who buy their insurance on the individual market will increase in 2024, but by a combined $411 million less than if the state had not taken steps to control costs, it was announced Monday the Colorado Division of Insurance.
Still, people who purchase coverage on the individual market can expect to see an average premium increase next year of between 6.5% and 19.6%.
As the state works to better reduce health care costs, some Coloradans could see additional savings on their personal insurance costs. Next year, people earning up to 250% of the $75,000 federal poverty level for a family of four will qualify for lower deductibles and co-pays on plans purchased in the individual market. Previously, the threshold was 200 percent of the poverty line, or about $60,000 for four people.
Funds to reduce out-of-pocket costs are available because the federal Centers for Medicare and Medicaid Services allowed Colorado to reuse some of the money saved. When premiums go down, the federal government doesn’t have to pay as many tax credits to people who buy on the individual market.
Most of the $411 million in savings – an estimated 24% reduction from what premiums would have been – comes from reinsurance, which essentially acts as a partial safety net, limiting what companies can offer. insurance companies must pay for their customers with the most expensive needs. Because federal law requires companies to spend 80 percent of the monthly premiums they collect to pay for their customers’ care, if they have to pay less money, rates go down.
The Insurance Division’s review process, which determines whether companies can get the premium rates they requested, and the Colorado option account for about three percentage points of the 24 percent reduction. The Colorado Option is a standardized plan that aimed to reduce premiums by 10% this year.
Gov. Jared Polis said he was “delighted” with the combined results.
“That’s why we have this process,” he said.
Most companies selling in the individual market received lower raises than requested, although the difference was less than two percentage points. The exception was the Denver Health Medical Plan, which requested a 7.8 percent increase but received more than double that increase.
Kate Harris, deputy insurance commissioner, said the division determined that Denver Health’s plans needed higher rates to be sustainable, but found savings from other insurers.
“It’s really important that all of their pricing is appropriate,” she said.
The average premium increases in the personal market for 2024 will be:
- Anthem: 12.7%
- Cigna Health and Life Insurance Company: 7.1%
- Denver Health Medical Plan: 19.6%
- Kaiser Foundation Health Plan of Colorado: 10.5%
- Rocky Mountain Health Maintenance Organization: 6.5%
Select Health, affiliated with Intermountain Health, also joined the Colorado market for the first time. Utah-based Intermountain gained a foothold in Colorado last year by merging with SCL Health.
The Insurance Division estimated that average increases would have been 30% or more without reinsurance. The greatest savings were made on the western slope, where premiums would have increased by more than 50%.
About a third of Colorado Option plans in the individual market have met the 10% premium reduction goal. These 25 plans are available in 15 counties, where about three-quarters of Coloradans live.
Harris said 73 contracts between insurers and hospitals had been renegotiated to reduce rates, contributing to an overall drop in premiums.
“Even though they’re not at that 10 percent drop, like the 25 (plans) are, there are still savings that are being made for Coloradans,” she said.
Last year, about 13% of people who purchased insurance in the individual market chose Colorado Option plans. Polis said he thinks it could benefit the market as a whole, attracting more customers.
“People who are uninsured or had to purchase another option might find the exchange more attractive,” he said.
This year was the first time the Insurance Division could have held hearings to determine why insurers’ Colorado Option plans were not meeting their goals. He canceled those hearings after determining that insurance companies and hospitals were negotiating to reduce rates, or had already reduced them by at least 20 percent, which was the maximum the state could legally require.
The number of plans that are not part of the Colorado option will decrease by 40, to 225, while the number of option plans will increase by six, to 78. It is unclear whether the change was entirely due to the release of health plans on Friday. of activity nationally, or if other companies reduced their offers.
Open registration begins November 1. People who want their coverage to begin in January will need to choose a health insurance plan by December 15.
To search for plans, visit ConnectForHealthCO.com.
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