By Bob Semro
Colorado’s Division of Insurance has approved 541 health insurance plans offered by 18 companies for insurance coverage next year.
Of these, 242 plans offered by 13 insurance companies will be sold through Colorado’s health insurance exchange, Connect for Health Colorado. These plans will be available for individuals and small businesses on Oct. 1, with coverage taking effect Jan. 1, 2014.
There’s good news in the numbers: The average rates are lower than many predicted and reflect a healthy level of competition.
Rates are divided into so-called “metal” tiers, levels of coverage known as bronze, silver, gold and platinum. The tiers indicate the percentage of a medical bill an insurance company will pay. Bronze plans will cover 60 percent of costs and platinum plans will cover 90 percent. Bronze plans also cover fewer of the out-of-pocket costs, such as co-pays and deductibles. As a result, monthly premiums for bronze plans are less than those for platinum plans. (Click here to see all individual rates for a 40-year-old non-smoker.)
According to the Division of Insurance, average monthly rates for an individual can vary by the following ranges (based on a 40-year-old non-smoker):
Bronze Silver Gold Platinum
Low $176.89 $232.91 $273.44 $311.40
High $524.49 $667.10 $774.16 $691.19
Out of exchange
Low $183.97 $239.69 $277.31 $312.67
High $464.14 $550.47 $690.99 $705.12
The reason for the variation is that costs differ based upon coverage (some plans offer more benefits than others) and where policyholders live (costs can be higher or lower depending upon what part of the state you live in). Also, premiums will depend on a person’s age, whether the policyholder is a smoker, and how many family members are included in a plan.
There also is a category of coverage for those under 30, known as the Colorado Young Adult plan (CYA). Average monthly rates, based upon a 27-year-old non-smoker that meets financial eligibility requirements, range from $135.57 (exchange) and $139.69 (non-exchange) to $355.27 (both).
The average monthly rates for small businesses are (click here to see all rates for a 40-year-old non-smoker):
Bronze Silver Gold Platinum
Low $224.04 $291.90 $341.53 None
High $539.33 $705.32 $807.68 None
Out of exchange
Low $229.69 $253.10 $324.36 $376.65
High $670.32 $1,003.69 $998.14 $967.95
Rates are important, but there are other things to consider in evaluating these plans.
Comparing these plans to existing plans is not a one-to-one proposition. Plans sold under the Affordable Care Act are brand new and cover a range of benefits that many previous plans did not. These include maternity coverage, hospitalization and prescription drugs, just to name a few.
All of these reforms are factored into the new rate structure, both in and outside of the exchange.
For many people, there will be federal subsidies to help pay for insurance. Individuals with income between $11,590 and $46,000 and families with income between $23,550 and $92,200 for a family of four will qualify. These subsidies will vary by income – the lower your income, the greater the subsidy.
Households that fit into these income ranges will pay from 2 percent to 9.5 percent of their income on health insurance premiums. Subsidies can be used only for insurance purchased through Connect for Health Colorado.
It’s worth pausing for a moment to note that most Coloradans will not see any change in their insurance. This is because the vast majority of Coloradans get their insurance through work or from a public program such as Medicare. For them, nothing changes. And larger companies, those with more than 50 employees, have long offered comprehensive benefits that now will be offered to the individual and small-group markets.
The number of plans and participating insurance companies show that Colorado has a very competitive insurance market, unlike other states where one or two insurance companies control the market. That makes it difficult to compare Colorado’s rates with other states.
But rates alone aren’t the whole story. Coverage will be guaranteed regardless of health status, many old restrictions have been eliminated and benefits will be much more comprehensive across the board.
As a result of reforms in the ACA, all individual and small business policies will cover the 10 “essential benefits”: hospitalization; emergency services; maternity and newborn care; mental health and substance use disorder services; prescription drugs; laboratory services; pediatric services; preventive-wellness-disease-management services; ambulatory services; rehabilitative and habilitative services and devices.
For Colorado consumers, that means it’s not just about the cost, it’s also about what you get for your dollar.
Bob Semro is a health care policy analyst with the Bell Policy Center, a non-partisan policy research center that advocates public policies that reflect progressive values.