More individual plan cancellations, increases slated for 2017

by Missy Votel

Going up? Requested INCREASES for individual plans for 2017: ↑ Anthem BCBS (HMO Colo.) +26.8% ↑ Cigna +9.5 % ↑ Colorado Choice +36 .33%                 ↑ Denver Health +0.08%                        ↑ Freedom Life Insurance +9.98% ↑ Golden Rule +40.6%              ↑ Kaiser Foundation Health Plan of Colorado +13.6%                     ↑ National Foundation Life +9.98 ↑ Rocky Mountain HMO +34.6% Requested INCREASES for small group plans for 2017: ↑ Anthem BCBS (HMO Colo.) +4.1% ↑ Colorado Choice +7.38% ↑ Humana Health Plan Inc. +6.35%         ↑ Humana Insurance Co. +4.36%       ↑ Kaiser Foundation Health Plan of Colorado +3.7% Requested DECREASES for small group plans for 2017: ↓ Aetna Health Inc. -4.4%                      ↓ Aetna Life Insurance Co. -3.6%            ↓ Kaiser Permanente -0.9% ↓ Anthem BCBS (Rocky Mountain Hospital & Medical Service) -2.9%          – Source: Colorado Department of Insurance

Clouds are forming on the horizon for many insured Coloradans, although for some, there will be a silver lining.

The Colorado Division of Insurance announced Monday that more than 90,000 resident will lose their coverage as four leading insurance companies scale back or eliminate their individual plans all together in 2017. Meanwhile, those maintaining coverage under individual plans can expect to see premiums go up next year by as much as 40 percent.

Insurance holders with individual plans through Anthem, United HealthCare, Humana and Rocky Mountain Health Plans will need to go shopping come the next enrollment period, starting Nov. 1. The good news: there will be one new addition to the list of health providers, Bright Health Plans. And premiums for small group plans are expected to go up by much smaller margins, with costs for a few actually going down.

Insurance commissioner Marguerite Salazar warned against panicking over the shake up, describing it as part of the anticipated “stabilization” of the state exchange, Connect for Health Colorado.

“Companies are still figuring it out – where to sell, how to sell, how to price – which is why we’re seeing some companies pull back,” she said. “Some companies have done a better job of figuring out how to operate in this new environment and compete for people’s business, while others must step back and reevaluate.”

Colorado is one of 14 states that opted to launch its own exchange instead of using the federal version after the passage of the Affordable Care Act.

The United Healthcare and Humana cutback will impact nearly 20,000 customers while Rocky Mountain Health Plans’ cut will affect about 10,000. The cancellation of Anthem Blue Cross/Blue Shield’s PPO (Preferred Provider Organization) will impact 62,310 people.

On the up side, Anthem will continue to offer HMO (Health Maintenance Organization) individual plans, and RMHP will still offer individual plans in Mesa County. All of the companies will continue to offer group plans for employers.  

The cancellations will affect approximately 20 percent of the 450,000 Coloradans who get their insurance on their own, either through the state exchange (Connect for Health Colorado) or privately. Those 450,000 consumers represent 7.7 percent of residents. Conversely, 51 percent of people in Colorado, or about 2.8 million, get their health insurance through an employer, which will not be affected by the cuts.

Rocky Mountain Health Plans has been a key player in the mountain areas and Western Slope, and its departure from the individual market will leave many areas with only one on-exchange company – Anthem Blue Cross and Blue Shield’s HMO.

Salazar noted the problem is not unique to Colorado but taking place on a national scale. “This could be an indication that there were too many options for the market to support,” she said.

As for the projected premium increases, Salazar said it is the result of people enrolled in individual plans using more healthcare services than anticipated. She said the DOI will evaluate requested premium increases, and the public has until July 6 to comment on those proposed increases.

The DOI is also attempting to get a handle on what’s driving the increased costs with a recently launched study looking at the feasibility of moving the state to a single geographic rating area and how healthcare costs impact premiums.

Despite the glum news, Salazar noted that consumers should not lose site of the fact that the small group market appears stable, with some companies even projecting decreases in premiums for 2017. In addition, more than 150,000 people signed up for coverage through Colorado’s Marketplace in 2015, bringing that state’s uninsured rate to 6.7 percent, down from 14.7 percent in 2013.

In addition, the state’s marketplace rates remain well below expectations, with 2014 rates coming in about 15 percent lower than Congressional Budget Office projections, according to the U.S. Department of Health and Human Services. Also, for the half of Americans who obtain health insurance through an employer, premiums for family coverage grew slower under Obamacare (an average of 5 percent per year from 2010-15) compared to 8 percent per year from 2000-10. And last year, premiums grew at an even slower rate – 4.2 percent. If premium growth had matched pre-Obamacare growth rates, the average family premium would have been almost $2,600 higher in 2015.

All this could be a moot point if ColoradoCare’s proposed Amendment 69, which would give all Coloradans universal health care, passes in November.

A recent poll conducted by Magellan, a national pollster – which incidentally is a “trusted partner” of Colorado’s infamously conservative Koch brothers – shows that a majority of state voters support Amendment 69.

The polling results were part of a Denver Business Journal story on ColoradoCare. “Pollster David Flaherty of Magellan noted that once they explained the measure to people in the way that backers would explain, approval of it went up among certain groups, giving it an overall approval of 55 percent of representative voters,” Business Journal reporter Ed Sealover wrote. “When pollsters re-explained it from opponents’ point of view, approval still remained at 51 percent, as opposed to 43 percent disapproval.”

The new plan would be paid for primarily through a 3.33 percent payroll deduction for employees and 6.67 percent payroll increase by employers.

“For a worker with a $50,000 income, employers would have to pay $278 a month and workers $139,” the Business Journal  reports. “That compares to a $1,400 average monthly cost currently for a platinum-level small-group plan for a family of four in Denver.”