An analysis Thursday by a Denver-based think tank found that state officials had actually envisioned behavior that was inconsistent with how consumers make decisions, resulting in the health insurance savings touted by the Police administration. Most are either not new or “hypothetical”.
In response, the head of the state’s health agency called the study “misleading.”
The Polis administration has previously credited its action with “substantial savings,” amounting to $326 million. In fact, in 2023, Coloradans will account for 7.4% in the small group market insuring businesses with 2 to 100 employees and 10.4% in the individual market serving people who have to pay their own health insurance premiums. face price increases.
At the heart of this issue is the Colorado Option, a state-designed health insurance plan that insurers must begin offering on January 1, 2023.
In the report, the Common Sense Institute, a free enterprise think tank, found that Colorado’s reinsurance program, which has been in place since 2020, has saved $294 million — more than the administration’s advertised $326 million. of which — has already been accounted for. It only affects individual markets, not small group markets.
An additional $14.7 million in savings “assumes consumers immediately switch to the lowest-cost Colorado Option plan within each metal tier,” the analysis said. Given that Colorado option plans aren’t the cheapest on the market, consumers are more likely to purchase the cheapest non-Colorado option plans, according to the report.
In addition, the Colorado option poses “a range of risks to the broader healthcare market,” particularly for the premiums consumers pay for health insurance.
Chris Brown, vice president of policy and research at CSI, said the required premium reduction will increase from 5% in 2023 to 10% in 2024, and will eventually reach 15% in 2025. As a result, it said it would be difficult for carriers to do business in Colorado.
The plan imposes cuts in health insurance premiums, as mandated by legislation adopted in 2021, but CSI believes that future premium caps will be too low and the healthcare industry will face future costs. He said that he could not cope with the increase in medical expenses.
This will force health care providers to choose between cutting services or raising prices for most insured Coloradans to pass on the costs, Brown said. Sponsored plans may take a hit at these higher costs.
“I think every healthcare provider, hospital, doctor, doctor faces a different set of variables when making that decision,” Brown told the Denver Gazette. , hospitals and doctors are also facing inflation, affecting the cost of providing healthcare.”
“When you see this kind of disruption, carrier exits and massive price increases, it makes it significantly harder to grow and operate a business,” Brown added.
In a statement, Colorado Insurance Commissioner Michael Conway argued that Coloradoans would see savings, suggesting claims to the contrary were “misleading.”
“Legislatives, law enforcement, and organizations that care about people have worked hard over the past four years to take steps to save people the cost of healthcare. is detailed in a press release from ,” Conway told the Denver Gazette. “The department’s rate review work, reinsurance programs, and the Colorado Option help people save money on health care.”
Conway added: “Health insurers have fought all of these programs at various times, so it’s not surprising that health insurers and their special interest groups continue to put out misleading information. We stand ready to work with ‘organizations that want to save people’s health care costs.’ I sincerely hope that you will make the decision to be involved in any way.
According to CSI’s analysis, the risks faced by providers will be “particularly evident” in the small group market.
The group notes that four health insurers have already pulled out of either Colorado’s small group or individual market, or both.
- Bright Health has removed all health insurance plans, including small group and individual, and Medicare, from Colorado, affecting at least 55,000 consumers in eight mountain counties.
- Humana plans to withdraw self-insured and small-group plans from Colorado by 2024, affecting 183,000 subscribers.
- Oscar Health announced in May that it was exiting the personal market.When
- Co-operative Peak Health, which provides insurance to 6,400 people, says it will not be operational in 2023.
Retirement means hundreds of thousands of Coloradoans will have to look elsewhere for health insurance and may lose access to their preferred providers.
The group also said 91 fewer individual market plans will be offered in 2023 than in 2022.
“In 2024 and 2025, more plans and carriers could be forced out of Colorado when tighter price controls are implemented,” said the CSI study.
CSI Executive Director Kelly Corfield said Coloradan faces these premium increases amid other inflationary pressures.
“Health insurance rates are going up, we know higher education tuition is going up, and we know that living in Colorado is becoming increasingly unaffordable. said Caulfield. “So in 2023, I think we want policymakers to think a little more about how all of these different policies interact. And I think you are.”
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