By Katie Kerwin McCrimmon
Coloradans hunting for health insurance will have 19 companies competing for their business with up to 1,000 different plans that could be offered through the state’s new health exchange and on the open market.
Starting in 2014, for the first time, insurance companies selling to individuals won’t be able to exclude people with pre-existing health conditions. That’s one of the reasons consumers and competitors are eagerly awaiting plan details and costs, which Colorado authorities plan to unveil Wednesday.
For now, Colorados Commissioner of Insurance Jim Riesberg says he’s pleasantly surprised that 19 health insurance companies want to vie for business here.
“It’s a rather significant number, which should mean we’re going to have good competition in Colorado,” Riesberg said on Thursday.
Riesberg said he had expected about a dozen companies to offer plans in Colorado.
The deadline for health insurance companies to notify regulators that they wanted to sell plans in Colorado was midnight Wednesday. Riesberg and a beefed-up staff of rate reviewers are now analyzing the proposals and plan to make the proposals public on May 22. He declined to name the companies until next week.
The plans won’t be approved or rejected until July 31. Then, potential customers will be able to start shopping for them on October 1 when Colorado’s new health exchange, an online marketplace called Connect for Health Colorado, is slated to open.
Riesberg did not yet have a sense of whether there will be “rate shock” over the prices for the new plans. He urged caution about reading too much into the numbers when they become public next week.
In part that’s because the plans feature a “base rate.” Many lower-income people will qualify for tax subsidies that will bring their rates down from that base price. Other customers may have to pay more than the base rate since insurance companies are allowed to charge higher rates to smokers, older people, those living in certain geographic areas and based on family size.
“The base rates are not what the ending prices are going to be,” Riesberg said.
Consumers will also be able to select from plans that offer varying levels of coverage for a package of “essential benefits” that all companies must provide.
“There may be rate shock or may not be rate shock,” Riesberg said. Regardless, “the essential health benefits (package) is a fairly rich package. It’s a very good policy. You get what you pay for.
“Putting too much emphasis on prices early on is going to muddle the decision-making. People can’t even begin to purchase plans until October. And they can’t find out what their subsidies are going to be until then,” Riesberg said.
Analysts with the Division of Insurance will review all the proposed plans to ensure that the prices are not too high or too low (which could mean that a company cannot fulfill its obligations) and that insurers are not discriminating against anyone.
Pricing will be a gamble for all the companies.
“We’re in a brand new marketplace,” Riesberg said. “Within the individual market, no one has ever had to do this before (accept all those with pre-existing conditions),” Riesberg said.
It’s unclear how many people will want to buy insurance, and how many will have gone without health care for years and may have pent-up needs.
“They may want every (medical) test under the sun,” Riesberg said. “It’s just a guess as to what the trend is going to be.”
Or, there could be less demand than anticipated if some of the estimated half-million uninsured people expected to buy through the exchange decide not to buy health insurance and pay federal fines instead.
Learning about the new proposed plans and their pricing is one of many puzzle pieces that must fall into place as the Affordable Care Act begins to be full implemented in 2014.
“This is a first step in a process of crafting a whole new marketplace,” Riesberg said. “In the individual marketplace, it’s a whole way of doing business not only for the consumers, but also for the (insurance companies.)”
Riesberg said he previously had concerns that the federal data HUB would not be ready by this fall. States like Colorado that are building their own health exchanges must be able to connect with the HUB in real time to determine if consumers qualify for tax subsidies. Recently, Riesberg said he’s become more confident that all the pieces of the puzzle will fall into place.
“Any time you have something brand new, there could be a hiccup,” he said. “But I think we’re setting the stage for some very exciting times for people to begin to take more personal responsibility for their health care decisions and as a result of that, building a healthier society.”