Consumers Should Sense a Bargain
A quirky side effect of the political fight over the ACA could bring lower prices to some Colorado consumers.
The Trump administration decided in late 2017 that it would no longer pay companies to provide relief from co-payments and cost sharing for their lowest-income customers. By law, customers must still receive the subsidies, so companies had to raise their prices to account for the lost federal payments.
Those subsidies are available only for silver-level plans. This year, Colorado regulators chose to follow the example of most other states and tell companies to apply the price hike only to silver plans. As a result, the average price of a silver plan (before tax credits) will jump 12.30 percent, while gold plans will rise 6.85 percent and bronze plans just 0.90 percent.
At the same time, the tax credits that many consumers receive to help with their monthly premiums are also based on silver plans, so those tax credits will become more generous. That means savvy consumers are likely to find a bargain on some plans when they go on sale late this fall: The more generous tax credit, based on the more expensive average cost of a silver plan, may help cover more of the cost of less expensive plans. In some states last year, consumers could find bronze plans at no cost because the tax credits covered their entire premiums.
Customers qualify for tax credits if they make less than four times the federal poverty level, or about $100,000 for a family of four. About 69 percent of Connect for Health Colorado’s customers have received tax credits so far in 2018.
The modest price increases that health insurance carriers have proposed for 2019 in Colorado should be taken as good news for a market that has been in turmoil the past four years.
But the drama is not over. Further actions from the Trump administration or Congress could make it riskier for insurers to participate in the ACA markets in the future. And lawsuits that aim to overturn other aspects of the ACA could progress through the courts in the next year.
Still, Friday’s news means that some of Colorado’s long-suffering consumers will be able to find a rare treat in the 2019 individual market — a bargain.