2017 Rate Increases for Colorado Individual Health Insurance Market

2017 Rate Increases for Colorado Individual Health Insurance MarketEDIT, 9/25/2016: Rates were approved recently by the Colorado Division of Insurance. The following average rate changes (actual changes will vary by plan) will take effect January 1, 2017 for the seven carriers that will offer individual market coverage through the exchange. They will also apply off-exchange, as all of these carriers offer their plans both on and off-exchange:

  • Bright Health Insurance Company (new for 2017)
  • Cigna: 9.5 percent rate increase
  • Colorado Choice: 42.9 percent increase
  • Elevate by Denver Health Medical Plan: 0.46 percent decrease
  • Anthem Blue Cross Blue Shield: 25.8 percent increase
  • Kaiser: 18 percent increase
  • Rocky Mountain HMO (Mesa County only) 34.9 percent increase

In addition to these seven carriers, three carriers were approved by the Department of Insurance to offer plans only outside the exchange. You can see details here (click on “more” and then click on “2017 approved medical plans”).

The three off-exchange carriers are Golden Rule, Freedom Life, and National Foundation Life. We’ve worked with Golden Rule for years, and they offer a variety of ACA-compliant plans. Their approved average rate increase for 2017 if 46.2 percent.

We do not work with Freedom Life or National Foundation Life. Although they have ACA-compliant plans available in numerous states, I found that their total membership in those plans is currently exceedingly low (in most states, it’s actually zero, although in some cases there are a handful of enrollees).

I keep track of what’s going on with the exchanges in every state, and I talked with some state insurance departments this summer to see why there were so few enrollees in those plans. The general consensus was that those plans are simply not actively marketed (they are listed on the carriers’ websites though, under “Essential Health Benefit” and Colorado is one of only two states where they have both silver and gold plans available). But Freedom Life and National Foundation Life also have numerous products that are not ACA-compliant, and which fall into the category of “excepted benefits.” It’s perfectly legitimate for carriers to offer excepted benefits (these include things like accident supplements, short-term coverage, and various limited benefit plans that are not regulated by the ACA), but it’s essential for consumers to understand what they’re buying: If you buy a plan that’s not ACA-compliant, you’re getting coverage that’s not as comprehensive as a regular major medical health insurance plan. If you’re buying it to supplement your health insurance plan (for example, an accident supplement), it could be a very useful product. But if you’re buying it as your only coverage, be aware that it will likely fall far short if you have a serious medical claim. And if you’re relying on an excepted benefit as your only coverage, you’ll also be subject to the ACA’s penalty for not having minimum essential coverage.

Now here’s the original article that I wrote in June when the proposed rates were published:

Last week, the Colorado Division of Insurance released preliminary data regarding health plans for 2017. You can see proposed plan counts, as well as the DOI’s summary of the changes that will be coming next year. Here’s a summary:

  • Bright Health Plan is joining the Colorado exchange for 2017. This will be the first time that a new carrier has joined the exchange since it first opened for business in the fall of 2013.
  • UnitedHealthcare and Humana are both exiting the individual market in Colorado at the end of 2016. This is not surprising, as they’re doing the same thing in many other states as well. In total, there are about 20,000 people who will need to select a new plan during open enrollment as a result of these carriers exiting the market.
  • Anthem is discontinuing their PPO plans. They will still offer HMO plans state-wide. There are 62,310 Anthem PPO enrollees who will need to pick a different plan for 2017 – they will be able to pick an HMO from anthem if they wish, but there will be no PPO options available, from Anthem or any other carrier.
  • Rocky Mountain Health Plans will only offer individual health insurance in Mesa County (Grand Junction area) in 2017. There are roughly 10,000 people with RMHP individual plans in other areas of the state, and they will need to pick a new plan for 2017.

Rates under review

For 2017, there will be seven carriers offering individual market coverage through Connect for Health Colorado when open enrollment starts on November 1. They’ve filed the following rate increase requests:

  • Bright Health Insurance Company (new for 2017, so no rate increase)
  • Cigna: requested 9.5 percent rate increase
  • Colorado Choice: requested 36.33 percent rate increase
  • Denver Health Medical Plan: requested 0.08 percent rate increase
  • Anthem Blue Cross Blue Shield: requested 26.8 percent rate increase
  • Kaiser: requested 13.6 percent rate increase
  • Rocky Mountain HMO (plans will be available in Mesa County only): requested 34.6 percent rate increase

The DOI will review the rate and plan filings throughout the summer, and final rates will be available in the fall, prior to the start of open enrollment.

Subsidies will help – for those who qualify

Some of these rate hike proposals are certainly steep. That’s the case across the country as we look ahead to 2017 – Colorado’s weighted average proposed rate increase is actually lower than the average across all states where rate filings have been publicized so far.

The DOI may or may not approve the rates as filed – we won’t know the details for another few months. But if the benchmark plan (second lowest-cost-silver plan in the exchange) in your area goes up in price, subsidies will also go up. I explained more about how that works here, but the gist of it is that if all the plans go up in price, subsidies rise too. The benchmark plan won’t necessarily be the same plan from one year to the next – one carrier’s rates might increase more than another’s, and a different plan might take over as the second-lowest-cost silver option.

Of course, subsidies only help if you’re eligible to receive them. If your income is more than 400 percent of the poverty level, subsidies are not available. 39 percent of the people who enrolled in plans through Connect for Health Colorado this year are not receiving subsidies. This is far higher than the 22 percent average across all 13 states that run their own exchanges (in the states that use Healthcare.gov, subsidies are even more common: only 15 percent of exchange enrollees in the federally-facilitated exchange are not receiving subsidies).

People who aren’t receiving subsidies – which includes everyone who enrolls off-exchange – will not be insulated from the brunt of whatever rate increases are approved for 2017. But for everyone, regardless of whether you’re receiving a subsidy or not – it’s essential that you shop around during open enrollment. Your broker can help you sort through the available options and make sure you’re enrolled in the plan that best meets your needs and budget for 2017.

If you’re on one of the aforementioned plans that’s terminating at the end of 2016, you’ll have no choice but to shop for a new plan. Even if your plan will still be available however, you’ll want to compare it with the other available options during open enrollment. When weighted average rate increases are published, they’re based on the assumption that everyone will keep their existing coverage. But if you’re willing to switch plans, you may be able to get a better deal.

A single rating area

The DOI is also conducting a study to determine the impact and feasibility of making Colorado one big rating area, rather than the nine rating areas that currently exist. The study will be completed by the beginning of August, so it’s possible that if changes are recommended, they could be implemented in time for 2018 plan designs. But 2017 plans and rates will already be nearly finalized by that point, so Colorado will continue to have nine rating areas in 2017.

About Louise Norris

Louise Norris has been writing about health insurance and healthcare reform since 2006. In addition to the Colorado Health Insurance Insider, she also writes for healthinsurance.org, medicareresources.org, Verywell, Spark by ADP, and Boost by ADP.

Comments

  1. David Keene says:

    Thank you for providing such a cogent summary of the outlook for Colorado in the 2017 enrollment.

  2. Will any PPO individual insurance policies be available in Colorado in 2017?

    • Bob, there are not expected to be any PPO options available in 2017.

      • Thanks, Louise, for confirming what many individual business owners feared. Sounds like it will be better to buy cheapest catastrophic policy and pay out of pocket instead of being chained to an HMO that your doctor won’t accept. A real shame.

  3. What a disaster. And to think there are people who want to double down with Amendment 69.

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