The Colorado Division of Insurance recently released the 2010 small group market report. The number of employers in Colorado offering small group health insurance dropped by 10% compared with 2009, and the number of Colorado residents with small group health insurance coverage dropped by 7%. The report contains comprehensive data on the availability of coverage, carriers in the small group market, pricing, and how the rating flexibility laws have impacted the market. The report does not indicate however, the insurance status of the employees who were covered in the small group market in 2009 but not in 2010.
We do know that the total percentage of uninsured residents in Colorado dropped slightly between 2009 and 2010: 15.7% of Coloradans had no health insurance last year, compared with 16.2% the year before. (note: I found this statistic cited in numerous places, including nearly identical data in the health rankings report card, but also found that the 2010 Annual Report from the Commissioner of Insurance showed that 15.7% of Colorado residents were uninsured in 2009, and 16.2% in 2008 – see page 7 – so there is some discrepancy).
While a 7% decrease in the number of people covered in the small group market sounds significant, it is a very small portion of the total population of the state. In 2009, there were 287,239 lives in Colorado covered by small group health insurance. In 2010, that number dropped to 267,411. That’s a difference of 19,828 people. Colorado has a population of over 5 million people, so the number of people who are no longer covered by a small group health insurance plan represents less than 0.4% of the total population of the state. Even if all of them had become uninsured, it would not have increased the percentage of uninsured residents by more than 0.4%.
I have not found any data that indicates what type of coverage – if any – is now in place for the people who are no longer in the small group market. But I’m curious as to whether the availability of HRAs combined with individual health insurance plans had anything to do with the decline in the number of small businesses offering group health insurance to their employees. Colorado has enacted various laws over the last decade pertaining to small group health insurance, but regardless of legislative actions, small group premiums have risen sharply over the years. The result is that some companies stop offering health insurance all together, while others have opted to drop their group policies and set up HRAs instead, allowing their employees to seek coverage in the individual market.
The DOI report on small group health insurance also noted that six of the 16 carriers that were offering small group coverage in Colorado have left or are leaving the state and are no longer offering small group policies. Although that sounds like a significant number of the carriers, it’s important to note that those six carriers amounted to only 1.5% of the small group market – most small group policies are not impacted at all by the departure of those six carriers.
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