Colorado health insurance rates to increase in 2023
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Health insurers are raising rates next year in Colorado — and some are abandoning the state.
Why it matters: The cost of health care is a key driver that makes it less affordable to live in Colorado.
- Higher insurance rates also lead people to forgo coverage or care, disproportionately affecting minority communities.
Moreover, it's a blow to Gov. Jared Polis, who stakes his term on lowering health care costs, and a setback for the new government-managed "Colorado Option" that Democrats promised would drive down costs.
By the numbers: The average health insurance plan on the individual market will increase 10.4% in 2023 with a 7.4% jump for small companies that buy on the group market.
- The average belies significant differences in the rate changes. Friday Health Plans will increase rates by 25.1% but the Denver Health Medical Plan will lower rates by 2.6%.
Between the lines: How much people will pay will vary widely because of subsidies available on the state's health insurance exchange, Connect for Health Colorado. Open enrollment begins Tuesday.
- About 80% of those who buy through the exchanges are eligible for discounts, the Colorado Sun reports.
The intrigue: The rate hikes are amplified by word that Humana will no longer offer employer group plans in Colorado starting June 30, 2024. It will affect about 18,000 policy holders, Colorado Politics reports.
- Bright Health — which insures 50,000 people in the state — recently announced it won't offer plans in 2023 because they can't be profitable.
- At least two other insurers also have plans to exit, experts say.
The big picture: The market shifts come as Colorado ramps up its regulation of the market and begins to offer a state insurance option.
- In many cases the insurers requested larger rate hikes, but regulators forced them to hold to a 2% profit margin.
Zoom in: The Colorado Option will debut in 2023 with three plans in all but Jackson County. The private plans must fit government-mandated coverage options and need to cut costs to consumers by 5% in each of the next three years under the law that created the program.
- Still, they aren't the cheapest plans on the market — which critics of the regulations say, suggest the program is failing.
- "The outcome of those decisions are fewer carriers offering individual and small group products to consumers across the state, less competition, and higher premiums," Colorado Association of Health Plans executive director Amanda Massey said in a statement.
The other side: The Polis administration is calling it a win because they are below the average price point and driving competition.
- "They're almost competing with themselves," Colorado insurance commissioner Michael Conway said. "They're trying to reduce their premiums to account for the fact that the Colorado Option is bringing premiums down."