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What‘s the Forecast? A Look Ahead at Health Insurance Premium Costs

    What‘s the Forecast? A Look Ahead at the Changes in Health Insurance Premium Costs

    This year’s health insurance rate filings provide some early answers to questions about the impact of health reform in Colorado. Are insurance premiums becoming more affordable? Is the newly reformed market healthy for insurers? How is Colorado stacking up compared with other states?

    The filings, released June 23 by the Colorado Division of Insurance (DOI), are required to show that insurers are meeting provisions of the Affordable Care Act (ACA). On average, the proposed rates hover between a 10 percent increase and a 10 percent decrease, with a few outliers. These filings include the average premium increases or decreases proposed by insurers across all of their products.

    The highest increase, 35 percent, is proposed by Time Insurance Co., which is only offering plans in the individual market, where people purchase health insurance on their own. Time Insurance Co. plans are not available for purchase through Connect for Health Colorado, the state-based insurance marketplace.  Denver Health Medical Plan—offering plans both on and off the marketplace—proposed an increase of 17.5 percent.

    At the other end of the spectrum, New Health Ventures proposed a 22 percent decrease and HMO Colorado proposed a 5.1 percent decrease. Both companies offer plans through the marketplace. 

    It is important to note that DOI is reviewing the proposed premiums. They won’t be finalized until September and won’t become effective until January 2015.

    How does Colorado compare with other states? Some information is starting to trickle out. For example, Connecticut and Michigan are mirroring Colorado to some extent. In Connecticut, premium proposals range from an 8.9 percent decrease to a 12.5 percent increase.  In Michigan changes ranged from a 21.6 percent decrease to a 17.6 percent increase, with the increases averaging 10 percent and the decreases averaging close to 10 percent.

    The picture will become clearer as more states finalize their rates.

    An additional note: Currently, Colorado has some of the highest premium rates in the nation for residents of resort regions such as Summit County. As September comes and the DOI finalizes insurance premiums, we should be able to see if the DOI’s new geographic grouping of Colorado’s rural areas has had any consequence on the premium cost for resort residents and those in other mountain communities.

    Are insurance companies entering – or exiting - Colorado’s insurance market? This answer will let us analyze whether Colorado’s insurance market will continue to be competitive. o new companies are offering plans through the marketplace. At the same time, no companies have left the market. Outside of the marketplace, two new carriers are offering medical plans and seven new carriers are offering dental plans. 

    This year, 1,071 plans were submitted to the DOI - 895 medical and 176 dental. Of the 895 medical plans, 312 are proposed to be offered through Connect for Health Colorado. The remaining 583 plans will be sold on the individual market outside of Connect for Health Colorado.

     What will the future look like? In many ways the filings raise more questions than they answer:

    • To what extent will premiums change over time?
    • How many people will be affected by increased premiums?
    • Will certain geographic regions see higher increases or decreases than other regions?
    • How do the rates in Colorado compare to the rest of the nation?
    • How will the DOI respond to these rate proposals?
    • Will benefits change with changes in premium costs?

    CHI will continue to monitor developments and keep you updated as the rates are finalized.