Colorado’s Health Insurance Rates Head Higher: A CHI Analysis

The Colorado Health Institute (CHI) today released an analysis of the 2016 health insurance rates approved by the state’s Division of Insurance.

The rates will rise an average of seven percent next year compared with a 1.2 percent hike in 2015.

CHI’s takeaways include:

The individual market is driving the increase. The people who buy their insurance directly from a broker, an insurance company, or through Connect for Health Colorado, the state-based marketplace, will see an average price hike of 9.8 percent. About 334,000 Coloradans were in this market in 2014, according to the DOI.

The small group market is seeing smaller hikes.  The average price increase is just 3.2 percent in the small group market, which encompasses workers in businesses with fewer than 50 employees. About 214,000 Coloradans were in this market in 2014, according to the DOI.

Prices are heading higher nationally, too. Colorado’s increases mirror a nationwide trend toward higher prices in the third year of ACA implementation.  The increases are reigniting a conversation about whether insurance is becoming more affordable, a primary ACA goal. Location matters when it comes to health insurance. Price hikes will be uneven across the state’s nine ratings regions. Boulder County will have the smallest increase — 5.8 percent in the individual market. Residents living in a large swath of western Colorado will see by far the largest average increase in the individual market at 25.8 percent.

There’s still competition, even with Colorado Health OP’s departure. Colorado enjoys more competition than many other states. Twenty companies are selling individual or small group plans, the same number as 2015. Those companies are offering a total of 1,073 plans, just one less than in 2015. 

Marketplace rates are heading higher than off-exchange rates. Plans sold through Connect for Health Colorado, the state’s online health insurance exchange, are increasing 12.1 percent, compared with 7.8 percent for polices sold off the exchange.

The final 2016 rates arrive in the wake of the October 16 announcement that the Colorado Health OP would be forced to shut down. That leaves 82,885 members — 79,877 with individual policies and 2,908 with small group policies — needing to shop for new insurance policies.

Because the Health OP had the lowest prices in many markets, it may be a challenge for their enrollees to find plans that match their existing rates.

Many Colorado insurance customers are feeling whiplash from the large rate increases for 2016, which come on the heels of sizable cuts in 2015.

This volatility is a sign that carriers are still figuring out how to adjust to insurance market reforms ushered in by the ACA. The volatility could continue for another year or more as additional uninsured people enter the market.

Need More Information?
Contact Senior Communications Expert Joe Hanel at hanelj@coloradohealthinstitute.org or by calling 720 382-7078.