Health insurance companies are staying in El Paso County for now, but at a price 

Instability for individuals

click to enlarge El Paso County has options, but 14 Colorado counties have only one insurer. - STOCK-ASSO /SHUTTERSTOCK.COM
  • Stock-Asso /Shutterstock.com
  • El Paso County has options, but 14 Colorado counties have only one insurer.

On July 14, the Colorado Division of Insurance (DOI) released preliminary information about the health insurance plans that may be available next year through the state health exchange (Connect for Health Colorado) — and it's not very heartening. Premiums are expected to skyrocket on the marketplace, which was set up under the Affordable Care Act (or Obamacare as it's more commonly known) to allow individuals who don't have employer- or government-sponsored plans to shop for health insurance. Last year, about 13,400 El Paso County residents enrolled through the exchange.

The exact cost of a plan varies, but the average projected increase is nearly 27 percent. That figure isn't final; it refers to what insurance companies have requested. The small business market has proposed rate increases averaging 7 percent. All five companies that offered plans in El Paso County last year plan to do so again.

State insurance regulators will now spend the remaining summer months reviewing insurance companies' requests to evaluate whether they're priced right and ensure they comply with state and federal law.

That last bit, about federal law, is the big unknown, and may be to blame for the pricier premiums. Congressional Republicans are scrambling to make good on a seven-year promise to "repeal and replace Obamacare." What exactly that looks like — and which current rules, definitions and programs might be spared — remains to be seen. As of press time, in the wake of Senate Republicans' latest failure to pass a repeal-and-replace bill, they briefly pursued a repeal-now, replace-later strategy. That also appeared to be dead on arrival.

In a press release, Marguerite Salazar, Colorado's Insurance Commissioner, says those policy unknowns are problematic: "Because of what is happening at the federal level, there is still a great deal of uncertainty in the marketplace. It remains pivotal that the Trump administration stops using people's access to health care as a bargaining chip and commits to funding the Cost-Sharing Reductions in 2018."

The bargaining chip she's referring to are federal subsidies that help cover out-of-pocket expenses incurred by low- to moderate-income people enrolled in mid-level, or "silver," plans. Under current law, insurance companies are required to keep deductibles and copays low in this category, then the government reimburses them for the difference. Last year, over 7 million people nationwide, and 33,000 people in Colorado, were able to afford health insurance thanks to cost-sharing reductions.

The trouble is, nobody knows whether the Department of Health and Human Services (HHS) will continue making these monthly payments to insurance companies. They're currently the subject of a Republican lawsuit arguing that Congress never appropriated them (even though Congress passed the law that authorized the program). Republican lawmakers got a favorable ruling in district court that the Obama administration appealed and the Trump administration has since inherited and stalled. With that litigation pending and the party's legislative prospects relying on the perception that Obamacare is unworkable, the White House has openly mused about ending cost-sharing reductions to ensure the current system falls into a death spiral.

Notably, eliminating the subsidies wouldn't actually save the government money, analysts have found. That's because premium tax credits for every qualifying, on-exchange plan are calculated based on silver plans. So, if insurers raise silver plan premiums to offset the lost subsidies, tax credits across plan tiers would grow proportionately. The Henry J. Kaiser Family Foundation projects that such a scenario would effectively cost the government $2.3 billion — 23 percent more than what's currently spent on subsidies.

And that's just one piece of the puzzle — also in play are the individual mandate, tax credit calculations and Medicaid expansion.

Amidst this uncertainty, insurance companies pulled out of the marketplace in several states, though it looks like Colorado will have at least one insurance carrier in every county. (Anthem, however, is the only carrier in 14 rural counties and has requested premium increases averaging over 30 percent.) But, they could still pull out.

Premiums went up last year — around 20 percent across the board — so the increase isn't completely unexpected, given the rising underlying cost of health care. But there are indicators that the market was stabilizing prior to Republicans' takeover in Washington, including analysis by the federal Centers for Medicare and Medicaid Services (CMS) showing Colorado's insurance market has the lowest "risk score" in the country, meaning costs are low and lots of healthy people are enrolling.

Given all that, Adam Fox, strategic engagement director for the Colorado Consumer Health Initiative (CCHI), blames Washington for the hike. "Insurers are going to have a really hard time pricing appropriately this year, so they're going to price conservatively," he says. "So the challenge for [DOI] is to determine how much uncertainty they want to allow insurers to price into their plans."

Most years, the CCHI submits comments to DOI pressing for insurers to justify premium increases, in an effort to promote consumers' interests. But he says they're more cautious this year, because letting insurers become insolvent is "not good for anyone either."

DOI's public comment period goes through Aug. 4.


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