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Modest Price Increases in Store for Second Year of Online Marketplace

The world of health policy is full of numbers, but few are as closely watched as the figures the Colorado Division of Insurance released Monday. The numbers were the new health insurance prices the division approved for 2015.

Supporters and foes of the Affordable Care Act both were looking to the numbers for an early indication of the impact of health reform on health insurance prices. The Colorado Health Institute put out an instant analysis late Monday to help sort through the information.

The verdict? A 1.18 percent increase. That’s an average of all prices weighted by the market share of the 20 insurance carriers active in Colorado. It’s a small hike compared with some of the hefty price increases consumers have seen in recent years. 

But results for individual Coloradans will vary. Some policy prices are increasing more than 50 percent. Others are dropping by more than a third. Average prices in the Fort Collins market are going up by more than 5 percent. Meanwhile, the ski resort counties that had the country’s highest insurance prices in 2014 will see the state’s largest average price cuts in 2015 – more than 7 percent.

Price increases are lower for people who shop on Connect for Health Colorado, the state’s insurance marketplace, in the individual market – an increase of 0.2 percent, compared with an increase of 2.4 percent for policies not sold on the online marketplace. However, it’s the opposite story in the small group market, where carriers are offering most of their policies outside of the online marketplace. Small group prices for policies bought through the marketplace will increase an average of 6.0 percent, while offline prices are going up an average of 1.9 percent.

The state’s new insurance cooperative, Colorado HealthOP, offers the cheapest policies in just about every region where it competes. The co-op has a $70 million low-interest federal loan that it will need to repay, and it’s too soon to tell whether its low-price strategy is sustainable. A better test of whether the online marketplace and the co-op are working to limit insurance prices will come in a few years, after all insurance carriers have more experience in this new environment.