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Colorado health insurance marketplace: history and news of the state’s exchange

Average rate increases for 2019 were under 6 percent; 2019 set a new record-high enrollment

Colorado health marketplace highlights and updates

Colorado exchange overview

State legislative efforts to preserve or strengthen provisions of the Affordable Care Act

Colorado is one of the states fighting hardest to preserve the Affordable Care Act’s provisions. See what the state is doing.

Colorado has a state-run exchange, Connect for Health Colorado. The state passed legislation in 2011 to create the exchange, and is among just 12 states (including DC) that are running their own exchanges and enrollment platforms in 2018. Colorado extended open enrollment for 2018 coverage, so it continued until January 12, 2018. And effectuated enrollment for 2018 was significantly higher than it had been for 2017, despite significant rate increases. But a larger percentage of enrollees qualified for premium subsidies in 2018, making coverage more affordable.

Although some carriers exited the Colorado exchange at the end of 2016 — as was the case in most states — Connect for Health Colorado is still among the most robust exchanges in the country, with seven carriers offering plans for 2019. There were 124 individual market on-exchange plans available in Colorado for 2018, which will continue to be the case in 2019 (this is down slightly from 132 in 2017).

Although 14 of Colorado’s 64 counties (all in the western region of the state) have just one carrier — Anthem BCBS — offering plans for 2019, those are sparsely populated counties. Almost 95 percent of Connect for Health Colorado’s enrollees live in areas where there are at least two insurers offering plans, and more than 83 percent of enrollees have three or more insurers from which to choose.

Bucking the national trend, bronze plans became the most popular option in Colorado as of 2016, with 45 percent of enrollees picking bronze during open enrollment. Nationally, silver plans are twice as popular as bronze plans across all of the state-run exchanges, and more than three times as popular as bronze plans in states that use Bronze plans were also more popular in Colorado than in other states in 2014 and 2015, but 2016 wass the first year that bronze plan selections outnumbered silver in Colorado. That continued to be the case in 2017 and 2018. Colorado has a lower-than-average percentage of enrollees who qualify for premium subsidies (although the number of people who qualify for subsidies has been growing steadily), so there are a significant number of enrollees who pay full-price for their coverage. Bronze plans are the lowest-cost option, so they tend to appeal to people who have to pay full price.

In the 2016 election, Colorado voters overwhelmingly rejected a state-based single-payer system (details below), which would have been the first of its kind in the country. And in 2017 and again in 2018, lawmakers in Colorado’s Senate indefinitely postponed a measure that would have provided premium relief to people who don’t qualify for ACA premium subsidies. The measure had passed the House in both years, but did not advance to a vote in the Senate, and Colorado residents who are ineligible for ACA premium subsidies continue to be ineligible for any sort of premium assistance. But Democrats gained control of the Colorado Senate in the 2018 election, and retained the governor’s office and control of the House. So those measures stand a much better chance if they’re reconsidered in 2019.

As of May 2015, Kevin Patterson became the new interim CEO of Connect for Health Colorado, taking over from Gary Drews. Drews was at the helm since August 2014, although he did not apply to be the permanent CEO. The Board approved Patterson to be the exchange’s permanent CEO in October 2015, and the legislative oversight committee voted unanimously to confirm Patterson’s position as permanent CEO on October 27, 2015.

2019 open enrollment ended January 15; enrollment total ended up slightly higher than 2018 enrollment

For 2019 coverage, open enrollment in Colorado continued until January 15. Due to high volume, however, Connect for Health Colorado has added a message to their website on December 15, noting that anyone who was unable to get through to the call center on the 15th would be allowed to enroll in a plan for 2019 as long as they contact the call center by December 18 and attest that they were unable to get through on the 15th due to high call volume.

In August 2018, the Colorado Division of Insurance published draft regulations proposing a permanent open enrollment schedule of November 1 to January 15. The regulation was finalized in November. Under the terms of the new regulation, Colorado will add a special enrollment period each year, from December 16 to January 15, during which anyone can purchase individual market coverage. That effectively makes open enrollment run from November 1 to January 15 every year. The new enrollment dates apply both on- and off-exchange.

In the states that use, open enrollment for 2018 coverage was much shorter than previous open enrollment periods had been. An HHS regulation that was finalized in April 2017 shortened the enrollment window to half of what it was originally scheduled to be. But Colorado implemented a one-time special enrollment period for 2018 coverage that continued through January 12. The new regulations implement a slightly longer enrollment period and make it permanent. In states that use the federal enrollment platform, enrollment will continue to run from November 1 to December 15.

With the extension through January 15, open enrollment for 2019 plans lasted three days longer in Colorado than open enrollment for 2018 plans. The day after enrollment ended, Connect for Health Colorado announced that 169,672 people had enrolled in medical plans for 2019. As described below, total enrollment for 2018 stood at 165,777 after the end of open enrollment, so enrollment grew for 2019.

Average 2019 rate increase less than 6%, and net premiums are lower for many enrollees due to cost of CSR being added to on-exchange silver plans

Open enrollment for 2019 coverage began November 1, 2018, and will continue until January 15 in Colorado. Average premiums are increasing modestly in 2019, but the majority of Connect for Health Colorado enrollees will see their net premiums (after subsidies are applied) decrease in 2019, due to the way the cost of cost-sharing reductions is being handled (more on that below).

For the 74 percent of Colorado exchange enrollees who are receiving premium subsidies, average net premiums will decrease by 24 percent in 2019, with the most significant decreases in the western and northern parts of the state (Grand Junction is the exception; subsidized rates for people keeping their current plan there are expected to increase fairly significantly. But enrollees who switch to the lowest-cost plan in Grand Junction can still see substantial rate decreases. The situation in Grand Junction is discussed below in more detail). For enrollees who don’t receive premium subsidies, including people who buy individual market plans outside the exchange, the average rate increase will be 5.6 percent in 2019, although it will vary considerably from one plan to another and from one area to another.

In Colorado, June 15, 2018 was the deadline for insurers to file proposed rates and plans for 2019 coverage. On July 13, the state published an overview of the proposed rates, which were much more modest than they were for 2018. The average proposed rate increase for individual market plans was 5.94 percent for 2019. Public comments on the proposed rates were accepted until August 3.

The Colorado Division of Insurance published the approved rate changes in early October. All seven of Colorado’s exchange insurers remained in the exchange in 2019. And all seven were also in the exchange in 2017; after some early upheaval, Colorado’s exchange appears to have reached a stable point in terms of carrier participation.

The seven insurers in Colorado’s exchange have implemented the following average rate changes for 2019:

  • Anthem: A 0.2 percent decrease for HMO Colorado, and a 2.6 percent decrease for Rocky Mountain Hospital & Medical Service, Inc. (Anthem had proposed a slightly more significant decrease for HMO Colorado)
  • Bright Health: 6.5 percent increase (Bright had proposed a 9.7 percent increase)
  • Cigna: 8.1 percent increase (Cigna had proposed an 8.8 percent increase)
  • Denver Health Medical Plan: 21.6 percent (approved as filed. This is the largest percentage rate increase in Colorado’s market, but Denver Health only has 1,398 members. This is still quite small in terms of market share in Colorado, but up from just 615 members in 2017, and Denver Health expects enrollment to continue to grow)
  • Friday Health: 7.3 percent increase (Friday Health had proposed a 7.5 percent average increase). Friday is expanding into every rating area of the state, although they will not have plans available in every county.
  • Kaiser: 7.5 percent increase (approved as filed)
  • Rocky Mountain HMO: 5.7 percent increase (approved as filed)

For 2018, Colorado was one of only five states where the cost of cost-sharing reductions (CSR) was added to premiums for plans at all metal levels, instead of just silver plans (you can read more about Colorado’s 2018 approach below). But for 2019 coverage, the Colorado Division of Insurance issued a bulletin confirming that insurers in Colorado would add the cost of CSR to on-exchange silver plan premiums and the rate filings (available in SERFF) confirm that insurers are following this protocol.

Because the cost of CSR is now being added to silver plans, the average proposed rate hike for silver plans was more than 12 percent, while the average proposed increase for bronze plans was less than 1 percent, and the average proposed increase for gold plans was less than 7 percent. If the exact same silver plans are also sold off-exchange, they have to include the cost of CSR in their premiums. But as long as the on- and off-exchange silver plans have a difference in benefits, the cost of CSR can be added only to the on-exchange silver plans.

To accomplish this, the Colorado Division of Insurance suggested the insurers could slightly adjust (by $5) the off-exchange ambulance/emergency transportation benefit in order to have a slight difference between the on- and off-exchange plans. The two plans would then have different identification numbers in the Health Insurance Oversight System (HIOS) and could then have differing premiums, with the cost of CSR added to the on-exchange version and not to the off-exchange version. Insurers have the option of using a different approach to creating a slight benefit difference between on- and off-exchange silver plans, but will need to discuss the proposal with the Division of Insurance before proceeding.

So while the on- and off-exchange silver plans will vary slightly, the differences will be negligible. This will allow the off-exchange plans — without the cost of CSR added to their premiums — to be a good choice for a person who doesn’t qualify for premium subsidies and yet wants to purchase a silver plan. For people who do qualify for premium subsidies, the subsidies will continue to offset the impact of annual rate increases. And subsidies will make coverage at other metal levels more affordable in Colorado in 2019 than it is in 2018, as the subsidies will grow commensurately with the price of silver plans, which will include the full cost of CSR in 2019 (here’s how this worked in most states in 2018, and why it benefits consumers to have the cost of CSR added to on-exchange silver plan premiums).

Connect for Health Colorado projects that two-thirds of subsidy-eligible enrollees will be able to select bronze plans that are free after 2019 premium subsidies are applied. Although this happened in many other states (here’s an example, from Wyoming) in 2018, it didn’t happen in Colorado because the cost of CSR was added to all plan premiums, and not just silver plan premiums. But now that Colorado is silver loading the cost of CSR for 2019, zero-premium bronze plans will be available to many enrollees, due to the much larger premium subsidies and the relatively smaller bronze plan prices. And in some areas of the state, enrollees who select plans from Kaiser, Denver Health, or Rocky Mountain Health Plans may be able to find gold plans that are cheaper than silver plans.

Friday Health expanded into all areas of the state; Grand Junction enrollees could see net rate hikes if they kept their 2018 plans

Colorado Choice, a Colorado non-profit that’s offered coverage for more than four decades, was purchased by Melody Health at the beginning of June 2017 (Melody had planned to offer coverage in Wyoming and Nevada for 2017, but did not get the necessary regulatory approval in time to sell 2017 plans). With the acquisition, Colorado Choice plans began to be marketed as Friday Health Plans for 2018, and are for-profit rather than non-profit. Colorado Choice plans were available in five of Colorado’s nine rating areas in 2017, and that grew to six rating areas for 2018. However, Colorado Choice/Friday Health offered fewer plans in each area in 2018.

For 2019, however, Friday Health has expanded into the three remaining rating areas, and joins Anthem in offering coverage in all nine of Colorado’s rating areas (Anthem offers plans in every county, whereas Friday only has partial coverage in three of the nine rating areas; their coverage in the West rating area in 2019 is limited to just two of the 21 counties). Friday’s rate filing indicated that they expect their membership to grow to 10,000 people as a result of their coverage area expansion. Pueblo has gone from having two insurers in the exchange to three, Boulder has gone from having four to five, and Grand Junction from two to three. Grand Junction is unique in that it’s the only rating area where Rocky Mountain Health Plans offers individual market coverage, and it’s the only rating area where Kaiser does not offer coverage.

The Division of Insurance published a chart showing the projected change in average after-subsidy premiums (for enrollees who receive premium subsidies) from 2018 to 2019, in each of the state’s nine rating areas, for enrollees who keep the same plan in 2019 than they had in 2018. Overall, it’s an average decrease of 24 percent. But in Grand Junction, subsidized enrollees who keep the same plan from 2018 to 2019 ended up with an average premium increase of 38 percent. However, if they were willing to switch to the lowest-cost plan at the same metal level, they saw an average after-subsidy premium decrease of 56 percent.

This is a perfect illustration of how a new insurer entrant can disrupt a market, and how the effect can be both good or bad, depending on your perspective. Friday Health has taken over the benchmark plan spot in Grand Junction, with rates that are lower than the benchmark would otherwise have been. That means everyone in that area who receives premium subsidies is getting smaller subsidies in 2019 than they would otherwise have received. If they opted to keep the same plan they had in 2018, they may have seen significant average net premium increases, due to the smaller premium subsidies. But if they opted to switch to a lower-cost plan in the same metal level (offered by Friday Health), they saw a sharp reduction in their premiums for 2019. But for people with pre-existing conditions, provider networks and drug formularies play a role in determining the feasibility of switching to a new plan.

Successful 2018 health care reform legislation: State is seeking CMS input on whether federal permission could be granted to allow anyone to buy a catastrophic plan; Colorado is also allowing brokers to charge fees

Expanding catastrophic plans to people of any age

S.B.132 was signed into law in 2018, and directed the state to conduct an actuarial study on the impact of allowing people over the age of 30 who don’t have hardship exemptions to purchase catastrophic plans. The bill was amended in February 2018 to ensure that the catastrophic plans would only be available through the exchange. The provision requiring that the state conduct an actuarial study and only submit the 1332 waiver if the proposal would not reduce total premium subsidies or increase average premiums was also an amendment (the initial bill would have just directed the state to seek federal approval to expand access to catastrophic plans).

The ACA’s premium subsidies cannot be used for catastrophic plans, so the expansion of catastrophic plans would likely only appeal to healthy people who aren’t eligible for subsidies and are currently paying full price for the cheapest bronze plans they can get (catastrophic plans are less expensive than bronze plans because they’re in a separate risk adjustment pool). The legislation stated that if the study found that doing so would not reduce the total amount of premium subsidies provided to Colorado residents, and would not result in higher average individual market premiums, the state would then submit a 1332 waiver to the federal government, seeking permission to allow anyone in Colorado to purchase a catastrophic plan (the ACA limits the sale of these plans to people under age 30, and people who have a hardship exemption from the ACA’s individual mandate).

The state contracted with Wakely for the actuarial analysis, and the results were published in November 2018. Wakely concluded that total premium subsidies would likely increase (by no more than 6.6 percent) during the first year of universally available catastrophic plans. This is because healthier people would be expected to migrate to lower-cost catastrophic plans, leaving a less healthy population in the metal-level plans. That would lead to higher premiums for the metal-level plans, and since premium subsidies are based on the cost of the benchmark silver plan, subsidy amounts are expected to be higher. And since the people switching to catastrophic plans are expected to be those who aren’t eligible for subsidies anyway, they wouldn’t be giving up subsidies (and thus saving the federal government money) with their switch to catastrophic coverage.

The ACA only allows 1332 waivers to be approved if doing so would not increase federal deficits. Since premium subsidies are funded by the federal government, Wakely’s analysis notes that “allowing greater enrollment in Catastrophic plans would not meet the Federal deficit requirement as part of a 1332 waiver.” But in October 2018, CMS issued new guidance for 1332 waivers, noting that although waivers still cannot be approved if they would increase the federal deficit in the long run, it’s now possible for a waiver to be approved if it would result in increased federal spending in a given year, but not overall. In light of this and the result of Colorado’s actuarial study, Colorado Insurance Commissioner Mike Conway sent a letter to CMS in November 2018, asking whether a 1332 waiver to expand access to catastrophic plans would be likely to be gain approval.

Information about S.B.132, the actuarial study, and correspondence with CMS can be found here.

Broker fees

S.B.136 was signed into law in 2018. It allows insurance brokers to charge clients a fee if the insurer doesn’t pay a commission. Brokers were not previously allowed to charge any sort of fee, and have historically only been compensated via commissions from insurance carriers (with enrollees paying the same price for their coverage, regardless of whether they use a broker or not).

But insurers are increasingly opting to eliminate broker commissions, resulting in fewer brokers who are willing to work with individual market clients (in the group market, insurers still pay commissions). S.B.136 was designed to ensure that there will continue to be brokers available to serve people who buy coverage in the individual market, although the consumers may have to pay for that assistance themselves.

The Colorado Division of Insurance proposed regulations for broker fees (here and here), which became effective August 8, 2018.

Failed 2018 legislation: Reinsurance, state-based subsidies, & Medicaid buy-in study did not pass, but the new Democratic majority in the Senate in 2019 could breathe new life into these measures

In 2017, Colorado enacted S.B.300, which directed the insurance commissioner to study ways to reduce premiums in the individual market and improve market stability. The legislation included mentions of the possibility of high-risk pools, reinsurance, or a hybrid of the two. The Department of Insurance completed their evaluation, and submitted their report to the legislature in October 2017, recommending reinsurance as the best approach and outlining the reinsurance programs that Alaska, Oregon, and Minnesota have implemented in order to reduce premiums in their markets (several other states received federal approval to implement reinsurance programs starting in 2019).

Lawmakers in Colorado considered a reinsurance bill in 2018, as well as a bill that called for conducting a study about Medicaid buy-in and another that would have created a state-based premium subsidy for people affected by the subsidy cliff in high-cost areas. All three bills passed the Democratic-controlled House in 2018, but none made it through the GOP-controlled Senate. In the 2018 election, however, Democrats gained control of the House. So starting in 2019, Colorado will have Democrats in the majority in both chambers of the legislature, and a Democratic governor (Governor-elect Jared Polis will assume office in January 2019). So it’s likely that some of these measures could be reconsidered in 2019, and would have much more of a chance of being enacted.


H.B.1392 was introduced in Colorado’s House in April 2018 in an effort to implement a reinsurance program. Although it passed the House, a Senate committee postponed it indefinitely in early May, amid concerns about funding for Colorado’s portion of the cost — employers felt that it wasn’t fair that state funding was going to come from an assessment on all insurance plans, and that the legislature wouldn’t commit any of the state’s current excess tax revenue for the program.

The legislation would have instructed the Colorado Department of Insurance to seek federal approval for a 1332 waiver to secure pass-through funding for a reinsurance program. The goal was to reduce premiums in high-cost areas by 30 percent, and in all other areas of the state by 20 percent (that would result in smaller premiums subsidies statewide, so the federal government wouldn’t have to spend as much on premium subsidies in Colorado; the 1332 waiver would be used to allow the state to use the savings to pay for reinsurance, as opposed to letting the federal government keep the savings).

But funding for the reinsurance program would also come from a fee assessed on Colorado health insurers, including those in the individual and group markets, as well as insurers that provide stop-loss or excess coverage to self-insured groups — and that state funding was the sticking point for the bill. An actuarial analysis had previously indicated that the state would have to come up with an estimated $178 million in order to fund the program, in addition to the pass-through funding that would be obtained via the 1332 waiver.

With the demise of H.B.1392, Colorado will not have a reinsurance program in 2019 to bring down individual market premiums, although several other states either already have reinsurance programs in place or are working to implement them.

State-based premium subsidies for people impacted by the subsidy cliff

H.B.1205 would have implemented a state-based premium subsidy through the end of 2019, for people living in the three most expensive rating areas of the state (the mountains —including Grand Junction, which is its own rating area — and the eastern plains) who earn between 400 and 500 percent of the poverty level (ie, their income is above the eligibility cap for federal premium subsidies) and for whom health insurance premiums would otherwise be more than 20 percent of their household income.

The premium subsidy would have been available for bronze, silver, and gold plans sold through the exchange, and there would have been a special enrollment period from June 1, 2018 to August 1, 2018, to allow people to newly enroll in a plan through the exchange with the state-based subsidies. The legislation called for an appropriation of $6 million from the general fund, to be used by Connect for Health Colorado to fund the state-based subsidy. The House passed the measure, but a Senate committee indefinitely postponed it in early May.

H.B.1205 was very similar to 2017’s H.B.1235, which passed the House in 2017, but not the Senate (the same Senate committee indefinitely postponed it, killing it for the 2017 session). The only real difference for consumers is that the 2017 bill would have provided assistance for people whose insurance premiums exceeded 15 percent of their income, while the 2018 bill would only have provided assistance to people whose premiums exceed 20 percent of their income. For reference, 400 to 500 percent of the poverty level is equal to $98,400 to $123,000 for a family of four purchasing health coverage effective in 2018.

When H.B.1235 was being considered in 2017, Connect for Health Colorado used a fairly conservative model that estimated enrollment would have grown by roughly 4,000 people if H.B.1235 had been enacted. 3,000 of them would have enrolled in the first quarter starting June 1, 2017, and the other 1,000 would have enrolled in the remainder of the program. H.B.1205 had a higher threshold for eligibility (more than 20 percent of income spent on premiums, rather than 15 percent), but premiums also increased substantially in 2018, resulting in more people having to spend in excess of 20 percent of their income on premiums. Minnesota implemented a similar state-based financial assistance program in 2017, in response to rapidly rising health insurance premiums.

Medicaid buy-in study

H.B.1384 would have directed the state to conduct a study on the costs, feasibility, and pros/cons of a Medicaid buy-in program, a public-private partnership option, or a community based or regionally based option for health coverage in the state. The study would also have considered the feasibility of implementing a pilot program for one or more of those coverage options in areas of the state where current plan options are limited (ie, the 14 counties in Western Colorado where Anthem is the only insurer offering plans in the exchange) and/or coverage is unaffordable (ie, primarily the areas outside of the front range).

If H.B.1384 had been enacted, the report would have been submitted to lawmakers by February 2019. No changes to Colorado health coverage options would have directly resulted from H.B.1384 if it had been enacted, as the bill only called for the state to conduct a study, as opposed to implementing a new program. The legislation was amended in April to include an appropriation of approximately $360,000 to pay for the study. The House passed H.B.1384, but it was indefinitely postponed by the same Senate committee that killed H.B.1205 and H.B.1392.

165,777 enrolled for 2018 — higher than 2017’s enrollment total as of January 31, 2017

Open enrollment for 2018 coverage in Colorado began November 1, 2017, and ended January 12, 2018. This was nearly a month longer than open enrollment in states that use, but it was nearly three weeks shorter than open enrollment had been in prior years, when it had run for at least three months.

By the time open enrollment ended, 165,777 people had enrolled in medical plans through the exchange. That was a little lower than the number of people who enrolled the year before — for 2017 coverage, Connect for Health Colorado had reported that 174,678 people enrolled in medical plans by March 2, 2017.

As of May 2018, effectuated enrollment stood at 142,474, which was about 86 percent of the initial enrollment volume. That’s consistent with national effectuated enrollment trends over the last few years.

Connect for Health Colorado published their official enrollment report for 2018 in March, available here. Colorado continues to be a state where a larger-than-average percentage of the enrollees pay full price (versus the national average), and where bronze plans are the most popular option, as opposed to silver plans in most states.

For comparison, the official report from CMS summarizing 2017 enrollment showed 161,568 people, which was lower than the final 2018 enrollment number. But the CMS report was lower than Colorado’s official 2017 enrollment number because it was based on enrollment as of January 31, 2017, and Colorado extended enrollment by a few days that year, giving people until February 3 to sign up. And the 174,678 people who had signed up by March 2, 2017 included people who enrolled in February 2017 due to a special enrollment period triggered by loss of other coverage (Humana and UnitedHealthcare terminated plans for about 20,000 people in Colorado at the end of 2016; they all had a special enrollment period in early 2017).

So enrollment for 2018 by January 12 was higher than it had been on January 31, 2017, but a little lower than it had ended up after the dust settled with the enrollment extension and the special enrollment periods for people whose plans terminated at the end of 2016. Either way, despite the fact that open enrollment was shorter, total enrollment for 2018 ended up very similar to the prior year’s enrollment.

The slightly lower overall enrollment (compared with enrollment by early March, 2017) could be partly due to the shorter enrollment period, but also partly due to the fact that Colorado had insurers apply the cost of CSR to all plans, on and off-exchange, rather than just silver plans (most states took the approach of applying the cost of CSR only to silver plans, which protects most enrollees and provides additional benefits to some, due to the larger premium subsidies that result)

69 percent of the enrollments for 2018 included premium subsidies. This is higher than Colorado’s historical trend (61 percent of Colorado exchange enrollees had premium subsidies in 2017), but still well below the national average. The subsidies are also much larger than they were in 2017, as subsidies grow to keep pace with premiums: In 2018, the average premium subsidy is $505 per month, versus $369 per month in 2017.

The increase in the percentage of enrollees getting premium subsidies is likely a result of higher overall premiums (more people become eligible for subsidies as premiums rise) as well as policy cancellations by people who don’t qualify for premium subsidies. Those individuals had no way of getting around the added cost of CSR for 2018, as Colorado insurers added that cost to all plans. For people who don’t qualify for premium subsidies, the full weight of the 2018 premium increases (an average of more than 34 percent) was added to their premiums, pushing coverage into the unaffordable range for some.

2018 rates: State regulators approved 26.7% average rate increase, but later added another 6% to account for CSRs

Rate and plan filings are typically due by mid-May in Colorado, but the Colorado Division of Insurance pushed back that deadline to June 19, amid the uncertainty surrounding the insurance markets. Rate filings were made publicly available on July 14.

All seven insurers that offer individual market plans in the exchange in 2017 committed to remaining in the exchange in 2018, although Kaiser was the only insurer that planned to remain in the small group (SHOP) exchange in 2018. In the individual market, insurers initially proposed an average rate increase of 26.96 percent, although that included two filings for plans that would only be available off-exchange (Freedom Life, at 27 percent, and Anthem’s catastrophic PPO, at 33.5 percent).

Shortly after the rates were filed, Commissioner Salazar explained that “these premium increases are not a surprise,” and that she “believe[s] that the dubious situation at the Federal level has contributed to the premium increase requests we’ve seen from the companies.”

Despite a robust review, regulators were only able to make a slight reduction in the proposed overall average rate increase, getting the average down to 26.7 percent from 26.96 percent. Most of the approved rates were very similar to what insurers had proposed, although the DOI made some significant changes to the rates that were filed by Bright Health and Cigna.

But those rate filings were based on the assumption that funding for cost-sharing reductions would continue in 2018. The Division of Insurance noted in September that they had backup rates that would be used if CSR funding were to be eliminated. On October 12, the Trump Administration announced that they would cut off CSR funding immediately. As a result, the backup rates were implemented in Colorado.

The Division of Insurance noted that the overall average rates would increase by 6 percentage points over the already-approved rates. Ultimately, the average rate increase in Colorado was 34.3 percent for 2018. Colorado was one of only four states where the cost of CSR was added to plans at all metal levels, rather than being concentrated only on plans at the silver metal level.

The following average rate increases were approved for the seven insurers that planned to offer individual market plans in the exchange (the rate changes that had been approved before CSR funding was eliminated are also shown; there is considerable variation in terms of how much the lack of CSR funding affected each insurer’s final average rate change):

  • Anthem: 32.3 percent (the initially-approved average rate increase had been 30.2 percent, approved as-filed, before CSR funding was eliminated; Anthem’s filing indicated they had 55,860 members in 2017)
  • Bright Health: 30.7 percent (the initially-approved average rate increase had been 27.4 percent—significantly higher than the 15 percent rate increase that Bright Health initially proposed, but very much in line with the revised 27.5 percent average rate increase that they filed in August)
  • Cigna: 42 percent (the initially-approved rate increase had been 30.9 percent, but Cigna had initially proposed a 44.3 percent average rate increase in June, and a revised 33.3 percent average rate increase in August). Cigna’s filing indicated that they had roughly 21,728 members.
  • Colorado Choice (Friday Health): 37.6 percent (the initially-approved average rate increase had been 29.7 percent—slightly higher than the 28.9 percent that Friday Health had filed, and the revised filing of 27.8 percent that Friday Health filed in mid-August). There were 9,606 members on Colorado Choice/Friday plans in 2017.
  • Denver Health Medical Plan: 26.2 percent (the initially-approved average rate increase had been 12.7 percent, which had been approved as-filed, although a revised filing in August proposed a 12.45 percent increase: Denver Health Medical Plan only had 675 members in 2017)
  • Kaiser: 34.6 percent (the initially-approved average rate increase had been 24 percent, which had been approved as-filed). The rate increase applied to roughly 110,000 members who had coverage in 2017.
  • Rocky Mountain HMO: 27.1 percent (the initially-approved average rate increase had been 11.5 percent—slightly lower than the 12.1 percent average rate increase that RMHP proposed; RMHP had 3,611 members in 2017, all in the Grand Junction area).

The rate filings are available in SERFF and the SERFF filing numbers are on the Colorado Division of Insurance statement about the approved rates. Some of the filings clearly indicated that a factor in the overall increase was the expected lack of enforcement of the individual mandate (or at least a perception that it wouldn’t be enforced) which insurers expect will lead to fewer people enrolling, and a less healthy risk pool than there would be if the individual mandate were being strongly enforced. The individual mandate has been repealed altogether as of 2019, but is still in place in 2018. The perception that it isn’t (or that it isn’t being enforced) results in a less healthy risk pool, however, as healthy people are more likely to go without coverage.

Approved rates climbed higher after CSR funding was eliminated

The rates that were approved in September were based on the assumption that cost-sharing reduction (CSR) payments would continue to be made to insurers. Colorado Insurance Commissioner, Marguerite Salazar, noted that “recent signs point to more and more bi-partisan support of the CSRs, so I believed it was important to use the CSR-funded premiums in our review… I simply cannot ask my fellow Coloradans to pay even higher premiums for something that at this point almost everyone agrees should be fixed.”

The Colorado Division of Insurance estimated (based on the alternate filings that insurers submitted) that premiums would have to be up to 14 percent higher (compared with the initially approved rates) in 2018 if CSR funding were to be eliminated, but they were hopeful that it wouldn’t come to that.

They indicated that they would only implement the backup rates if CSR funding were to be definitively cut off — as opposed to just ongoing uncertainty, which had already triggered many states to have insurers add the cost of CSR to their premiums.

But unlike other states where insurers have loaded the additional premiums only on silver plans, Colorado insurers were instructed to submit supplemental filings that spread the cost of CSR across plans at all metal levels. The largest additional average increase that any Colorado insurer filed was 14 percent; the other filings were for smaller average increases, with an average of 6.1 percent.

The Colorado Division of Insurance clarified that their decision to have insurers spread the cost of CSR across all metal plan premiums (as opposed to just silver plan premiums) was made because the state wasn’t sure that the federal government would accept a silver load strategy. Insurers filed the backup rates in the early summer of 2017, and it wasn’t entirely clear what other states were going to do at that point. Although almost all states ultimately ended up having insurers add the cost of CSR only to silver plan premiums — and the federal government didn’t push back against that strategy for 2018 — Colorado regulators were afraid that they would end up in a situation where they needed to deploy their backup rates, only to find out that the federal government wouldn’t allow those rates, leaving them with no fallback plan. Hence, the backup plan included adding the cost of CSR to premiums for 2018 plans at all metal levels.

On October 12, the Trump Administration announced that CSR funding would end immediately. As a result, the Colorado Division of Insurance implemented the backup rates and Connect for Health Colorado began the process of loading the new rates into their system. The good news is that all of Colorado’s exchange insurers filed backup rates, so none of the insurers left the exchange as a result of the Trump Administration’s decision to end CSR funding. And CSR plans continue to be available to eligible enrollees, as is the case nationwide.

For people who get premium subsidies, the subsidies grew in 2018 to offset all or most of the additional premium increase necessary to cover the cost of CSR. But because the premium load to cover CSR was added to all plans at all metal levels, there was no way for enrollees who don’t get premium subsidies to avoid the additional cost. It’s noteworthy that Colorado has a larger-than-average percentage of exchange enrollees who pay full price for their coverage. In Colorado, 35 percent of enrollees did not receive a premium subsidy in 2017, as opposed to only 16 percent nationwide. However, for 2018, more people in Colorado are receiving premium subsidies.

Commissioner Salazar sent a letter to Colorado’s Congressional delegation in April 2017, explaining the urgent need for Congress to act to stabilize the individual insurance market. Salazar’s letter included a mention of the dire need for ongoing CSR funding. Her pleas were echoed by Connect for Health Colorado (in a joint letter signed by most of the state-run exchanges) and then-Governor Hickenlooper (in a bipartisan letter written by several governors).

After subsidies, rates decreased slightly in 2018 for some exchange enrollees

A Kaiser Family Foundation analysis of proposed rates finds that for a 40-year-old non-smoker, the second-lowest-cost silver plan in the Denver area is 12 percent more expensive in 2018 (before any premium subsidies are applied) than it was in 2017. Note that the change in premium for the second-lowest-cost silver plan is typically smaller than the overall proposed premium increase, since the second-lowest-cost plan isn’t necessarily the same plan from one year to the next.

This analysis is useful in terms of projecting how much premium subsidies will change for the coming year, since the subsidies are designed to keep pace with the cost of the second-lowest-cost silver plan. If the 40-year-old in Denver earns $30,000 a year, he or she will actually pay 3 percent less, after subsidy, for the second-lowest-cost silver plan in 2018 (which may or may not require a plan switch during open enrollment). This is because the poverty level has increased slightly, and the percentage of income that people have to pay for their coverage has decreased slightly.

So for people who receive a premium subsidy, the rate increases for 2018 are being offset by larger subsidies. This is the case for the majority of exchange enrollees, although Colorado has a much larger percentage of its exchange enrollees who pay full price than most states. Nationwide, 84 percent of exchange enrollees receive premium subsidies, but in Colorado it was only 65 percent in 2017.

But Connect for Health Colorado reported at a mid-December board meeting that 75 percent of the enrollments for 2018 at that point included premium subsidies; that trend may or may not continue as open enrollment draws to a close, but increasing premiums do result in more people being eligible for premium subsidies, as premiums take up an increasing portion of households’ incomes. Enrollees who receive premium subsidies are protected from the brunt of the rate increases in 2018, but those who don’t get premium subsidies, which includes everyone who buys coverage off-exchange, are paying substantially higher rates.

All 7 insurers committed in exchange in 2018; all counties continue to have coverage options

Although all areas of Colorado had insurers slated to offer exchange coverage in 2018, the Colorado Division of insurance noted in July 2017 that “insurance companies have indicated to the Division that they may be forced to reevaluate their participation in the marketplace if the lack of clarity at the federal level continues.” Marguerite Salazar, who was the Insurance Commissioner in 2017, explained that “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 healthcare as a bargaining chip and commits to funding the Cost-Sharing Reductions in 2018.

Earlier in 2017, reports that Anthem was evaluating whether to remain in the exchanges in 2018 had caused concern in several states, including Colorado, that have areas where Anthem is the only participating exchange insurer. But on June 20, the Denver Post’s John Ingold confirmed that Anthem had filed rates for 2018 individual market coverage in Colorado. But Anthem has announced impending exits from some other states over the summer, despite filing rates for those states earlier in the spring. So there was still some uncertainty in terms of whether Anthem would indeed remain in Colorado’s exchange in 2018. In mid-August, however, the Colorado Division of Insurance announced that Anthem (and all of the state’s other exchange insurers) had committed to remaining in Colorado’s exchange statewide in 2018.

A full Anthem exit in Colorado would have caused significant problems, as there are 14 counties in western Colorado that have only Anthem as an option in the exchange in 2017. In early June, Governor Hickenlooper was considering the possibility of enacting regulations similar to recent New York regulations that would bar insurers from state managed care contracts if they stop offering coverage in the exchange. New York’s insurers have far more members covered under state managed care contracts, so they have more leverage with insurers than Colorado does, and the state has not made any firm decisions yet in terms of what they can do to ensure that all residents have access to exchange plans in 2018. But the problem was mitigated for 2018, as Anthem remained in the exchange statewide, ensuring that there were no “bare” counties.

2017 enrollment: Nearly 175k enrolled

In October 2016, Connect for Health Colorado debuted their new Quick Cost and Plan Finder tool, designed to help enrollees compare plans and out-of-pocket costs.

Open enrollment for 2017 coverage ran from November 1 to January 31, and enrollment ended up well above prior year totals. Connect for Health Colorado reported that 172,361 people enrolled in medical plans for 2017 by February 5, 2017 (including stand-alone dental plans, there are a total of 175,964 enrollees). 62 percent of the enrollees qualified for premium subsidies, which average $317 per month, per household.

Open enrollment had ended on January 31, but Connect for Health Colorado gave people until February 3 to finish enrolling, if they had begun the process by January 31. In addition, people whose plans ended at the end of December had until the end of February to enroll in a new plan (loss of coverage is a qualifying event that triggers a 60-day special enrollment period). As a result, enrollment continued to grow throughout February.

Connect for Health Colorado reported that 174,678 people enrolled in medical plans through the exchange by March 2, in addition to 3,737 stand-alone dental enrollments (a total of 28,213 people enrolled in dental plans, but most of them also enrolled in medical plans). 61 percent of the people who enrolled in medical plans for 2017 are receiving premium tax credits (subsidies) that average $369/month. That’s the same percentage as 2016, but the average tax credit is higher in 2017 (it was $294/month in 2016) because average premiums are higher and the tax credits have to be larger to keep after-subsidy premiums at a level that’s considered affordable.

The federal government put out an official report in March 2017, showing how many people enrolled in each state’s exchange by January 31. In Colorado, the total was 161,568. That’s lower than the February 6 press release total, but that’s because they were referencing different days (January 31 versus February 5). And the Colorado enrollment report as of March 2 includes all of the people who enrolled in February due to loss of coverage at the end of 2016.

Even with the lower total on January 31, enrollment in Connect for Health Colorado was more than 7 percent higher than it had been during the 2016 open enrollment period. Nationwide, there was an average decline in enrollment among states that use, and an average increase in enrollment among states that run their own exchange platforms. The decline in states that use was likely linked to uncertainty about the future of the ACA, and the Trump Administration’s decision to cut outreach and advertising during the final week of open enrollment. This didn’t impact states like Colorado, that run their own exchanges and conduct their own marketing and outreach.

In Colorado’s exchange, enrollments for 2017 tracked consistently higher than 2016 numbers, throughout open enrollment. By the end of November, the number of enrollments was 23 percent higher than it had been at the same point a year earlier. High enrollment volume continued in December, particularly leading up to the December 15 deadline to enroll in a plan with a January 1 effective date. The exchange reported that on December 14, there were 10,000 plan selections, and another 12,000 on December 15.

20% average rate hike for individual market in 2017

On September 20, the Colorado Division of Insurance released the approved rates for 2017 plans. In the individual market, the Division of Insurance announced that premiums will increase by an average of 20.4 percent (on-exchange, the average is 20.9 percent, while off-exchange, it’s 19.9 percent), but in the small group market, the average increase will be just 2.1 percent.

However, the Wakely Consulting Group worked together with the Department of Insurance to analyze available plans for 2017, and reported that premiums were increasing an average of 24 percent for people who weren’t eligible for subsidies and whose existing plans would still be available for 2017. People who aren’t eligible for subsidies are more likely to select Bronze plans, and the average rate increase on Bronze plans for 2017 (25 percent) was higher than the average rate hikes for the other metal levels.

The Colorado Department of Insurance reviewed rate filings throughout the summer for the carriers that proposed plans for 2017. In the individual market, seven carriers filed rates for on-exchange plans, down from ten in 2016. During the rate review process, rate hikes were adjusted — both up and down — for nearly every carrier. For the seven carriers that are offering plans in the exchange for 2017, proposed and approved average rate increases are as follows:

      • Bright Health Insurance Company (new for 2017 in eight of Colorado’s 64 counties)
      • Cigna: proposed 9.5 percent rate increase (approved as filed)
      • Colorado Choice: proposed 36.33 percent rate increase initially, but revised it to 32.3 percent. Approved rate increase is 42.9 percent (Colorado Choice has been purchased by Melody Health transitioning the insurer from a nonprofit to a for profit entity; they plans to expand their coverage area for 2018, and the new plans will be marketed under the name Friday Health Plans).
      • Denver Health Medical Plan: proposed 0.08 percent rate increase; approved rate decrease of 0.46 percent
      • Anthem Blue Cross Blue Shield: proposed 26.8 percent rate increase; approved rate increase os 25.8 percent
      • Kaiser: proposed 13.6 percent rate increase; approved rate increase of 18 percent
      • Rocky Mountain HMO (Mesa County only): proposed 34.6 percent rate increase, but later revised it to 49.5 percent; approved rate increase is 34.9 percent. Rocky Mountain HMO is being purchased by UnitedHealthcare, pending approval by state regulators. Assuming the sale goes through, consumers in Mesa County will still have access to the same Rocky Mountain HMO plans, but the carrier will no longer be a non-profit entity.

In the small group market, five carriers filed rates and plans for 2017 coverage in the exchange. Their proposed rate changes were much more modest than the proposed rate increases in the individual market. Proposed and approved rate changes are as follows:

      • Colorado Choice: proposed 7.38 percent rate increase; approved rate increase is 6.6 percent
      • Anthem: proposed 4.1 percent rate increase (approved as-filed)
      • Kaiser: proposed 3.7 percent rate increase; approved rate increase is 3.5 percent
      • Rocky Mountain HMO: proposed 5.1 percent rate increase; approved rate increase is 16.1 percent
      • Rocky Mountain Healthcare Options: proposed 11.2 percent rate increase; approved rate increase is 10.2 percent

Humana, UnitedHealthcare exited individual market at the end of 2016

At the end of 2016, Humana and UnitedHealthcare exited the individual health insurance market in Colorado, both on and off-exchange. United exited the exchanges in most of the states where it participated in 2016, and Humana exited several states.

United offered plans in 42 of Colorado’s 64 counties in 2016, but they had one of the two lowest-cost silver plans in just one of those 42 counties.

According to the Colorado Division of Insurance, the carriers’ decisions to leave the individual market impacted about 20,000 people. There were 10,549 Colorado residents with individual market coverage (including on and off-exchange) through UnitedHealthcare, and 9,914 with individual coverage from Humana. In total, that amounts to about 4.8 percent of the 420,000 people who had individual health insurance in Colorado in 2015.

Golden Rule, which is a UnitedHealthcare subsidiary, continued to offer individual market plans outside the exchange; United and Humana both continued to offer plans in the group market in Colorado.

RMHP exited most areas, Anthem dropped PPOs at the end of 2016

Rocky Mountain Health Plans (RMHP, otherwise known as Rocky Mountain HMO) and Anthem BCBS continued to offer plans in the individual market — including in the exchange — in 2017, but their offerings were reduced.

RMHP began offering individual market plans only in Mesa County as of 2017. This is the Grand Junction area, and it’s where RMHP is based. Roughly 10,000 people in other areas of Colorado needed to enroll in new coverage for 2017, as their RMHP coverage ended at the end of 2016. RMHP’s exit from the individual market in the mountains and western slope left many areas in that region with Anthem BCBS as their only on-exchange option for 2017.

Anthem continued to offer HMO plans throughout Colorado in 2017 (and continues to do so as of 2019), but they discontinued their PPOs at the end of 2016. There were 62,310 people with Anthem PPOs in the individual market in Colorado in 2016. All of them had to select a new plan for 2017. They still had access to Anthem plans, albeit HMOs.

All together, including Humana, United, RHMP, and Anthem enrollees, more than 92,000 people had to switch plans at the end of 2016. A special enrollment period applies when coverage is terminated, and it has different effective date rules. So all of those folks had until December 31 to pick a new plan with a January 1 effective date. If they didn’t, their special enrollment period continued for 60 days (through March 1), with an effective date the first of the month following enrollment.

Bright Insurance joined exchange in 2017

Although some of the already-established health insurers in Colorado exited the market or reduced their offerings, Bright Health Insurance was approved by the Colorado Department of Insurance to offer individual plans on and off the exchange in 2017.

The individual market in Colorado had been dominated mostly by Kaiser Permanente, Anthem Blue Cross Blue Shield, and Cigna, so there was plenty of room for a new carrier to enter the market and cause a shake-up in market share. However, the experience of Colorado HealthOP (detailed below) is a cautionary tale about right-sizing premiums and growth.

Bright is the first new carrier to enter the exchange in Colorado since the exchange opened for business in the fall of 2013. They began offering plans in eight of Colorado’s 64 counties in 2017: Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, and Summit counties (there are 16 zip codes in Boulder County, but Bright Health Insurance is only available in four of them. The other seven counties appear to have coverage county-wide though). They are continuing to offer coverage in those eight counties in 2018.

2016 QHP enrollment: 169k, with nearly 146k effectuated

157,317 people had enrolled in private health plans (QHPs) through Connect for Health Colorado by February 2, 2016. Open enrollment ended on January 31, but there was a special enrollment period (SEP) – through the end of February – for people who lost coverage in Colorado at the end of December 2015 (more details below).

By the end of February, enrollment in QHPs through Connect for Health Colorado had grown to 169,156. Total enrollment for 2016 (including SEP enrollment in February) was about 19 percent higher than the 141,639 people who enrolled in QHPs through the exchange during the 2015 open enrollment period.

As of mid-May 2016, the exchange confirmed by email that effectuated enrollment was at 145,930. This is significantly higher than the 116,466 effectuated enrollment number in the most recent Connect for Health Colorado dashboard report from April. The discrepancy was due to a lag time in reporting from carriers between plan selections and effectuations (initial premium payment).

The exchange released their August enrollment report in September 2016, and although it showed cumulative enrollments continuing to increase, the reports never break out the actual number of people who currently have in-force individual market coverage through the exchange.

In addition to QHP enrollments, 54,447 people enrolled in Medicaid through the exchange from November 1 to January 31, 2016, and 3,549 enrolled in CHP+ (Child Health Plan Plus). Enrollment in Medicaid and CHP+ continues year-round, but tends to spike during open enrollment due to the increased outreach and advertising.

25,604 people enrolled in dental coverage through Connect for Health Colorado between November 1 and January 31 (most of them also enrolled in health insurance coverage, but stand-alone dental is available even to people who want to purchase dental coverage by itself).

DOI banned differing commission structures for brokers

In late 2015, many of the nation’s health insurance carriers began reducing or eliminating broker commissions, mostly for plans sold outside of open enrollment (during special enrollment periods triggered by qualifying events) or for benefit-rich plans at the gold and/or platinum level.

The general consensus was that the commission cuts were an effort by health insurance carriers to limit sales in general, or to limit sales of benefit-rich plans, which tend to be more popular among enrollees who have health conditions, and are more expensive to insure. In 2014 and 2015, eligibility for special enrollment periods was very loosely enforced by and some of the state-run exchanges, and carriers noted that healthcare utilization tended to be higher for people who enrolled outside of open enrollment.

In December 2015, Colorado’s Department of Insurance issued a regulatory bulletin (B-4.87) stating that carriers cannot offer “differing commission structures,” which they defined as different commission levels for different metal levels, different commission structures for plans sold during open enrollment versus outside of open enrollment, or “not paying commissions on certain plans offered in the State of Colorado.” The Department of Insurance warned carriers that none of those actions are allowed, and that carriers that utilize differing commission structures would risk “enforcement actions to remedy those violations.”

The purpose of the state’s regulatory bulletin was to protect consumers’ access to the full range of plans available, regardless of whether the consumer is enrolling during open enrollment or as a result of a qualifying event, and regardless of what metal level plan the consumer needs.

Bulletin B-4.87 is still in effect, but some insurers in Colorado have simply switched to a model under which they pay no commissions at all for new enrollments. There’s no “differing commission structure” so the lack of commissions doesn’t run afoul of the regulation. But it does result in fewer brokers being willing to assist people with individual market coverage (commissions are still paid by all insurers for group health insurance plans). After declining in 2017 and 2018, broker commissions have increased again for 2019, as insurers have started to once again be profitable in the individiual market.

Thousands of people needed new plans for 2016

There were still 75,000 people with grandmothered plans in the individual market in Colorado in 2015, and all of them had to select new coverage for 2016, as grandmothered plans terminated at the end of 2015 in Colorado. There were also 82,000 people with CO-OP (Colorado HealthOP) plans who had to pick new plans for 2016, as the CO-OP shut down at the end of 2015.

All of these individuals had until the end of February to enroll in a new plan, as loss of coverage is a qualifying event that triggers a special enrollment period (SEP) that extends for 60 days after the loss of coverage. The special enrollment period also applied to former Health Access Colorado members (New Health Ventures), people who lost Time/Assurant plans, and people who lost Rocky Mountain Health Plans coverage (RMHP is still available in Colorado, but with a smaller service area than they had in 2015).

64,000 of the 82,000 people who had CO-OP plans in 2015 had their coverage through the exchange. As of early January, Connect for Health Colorado reported that only about 25,000 of those people had enrolled in new coverage through the exchange for 2016. The other 39,000 were either uninsured in January or had selected coverage outside the exchange. Colorado HealthOP had by far the lowest premiums in most areas of Colorado in 2015, and particularly for enrollees who don’t receive premium subsidies, the switch to a different carrier meant a sharp increase in premiums for 2016 (in hindsight, the low premiums and generous benefits that the CO-OP offered were clearly unsustainable, but that’s little consolation to the people who had to pay significantly more to maintain health insurance coverage after the end of 2015).

The exchange worked to enroll more of the former CO-OP members during the special enrollment period that extended through the end of February. Ultimately, enrollment in QHPs grew by almost 12,000 people during February 2016.

Should Colorado be a single rating area? DOI recommends keeping multiple rating areas

Colorado has significant disparity in terms of healthcare costs — and thus health insurance premiums — from one area of the state to another. Rates in the mountain areas of the state are far higher than rates along the I-25 corridor, and although subsidies make coverage affordable for people who are eligible, there’s no assistance for someone earning more than 400 percent of the poverty level.

As an example, a 59-year old in Pagosa Springs who earns $50,000/year would have to pay $1,063/month (25 percent of her income) for the least expensive bronze plan available in the exchange in 2019, and is ineligible for any premium subsidies to make the coverage more affordable (note that if she earned $48,000, she would be eligible for $1,006/month in premium subsidies and could get the least expensive plan for just $56/month; the subsidy cliff is most significant for older applicants in areas where health insurance is expensive).

In an effort to address the disparity, then-Governor Hickenlooper signed HB 1336 into law in May 2016. The bill directed the Colorado Department of Insurance to study the impact of making Colorado one unified rating area, meaning that premiums would rise in the areas where they’re currently lower, and would fall in the mountain areas of the state where they’re currently higher.

The DOI’s report on the impact and viability of a single rating area was presented to the legislative committees in August 2016. The DOI did not recommend that the state become a single rating area, but recommended instead that the state work to find ways to lower the underlying cost of health care, since that’s what drives health insurance premiums. Insurance Commissioner Marguerite Salazar noted that a single rating area strategy could backfire, leading carriers to adjust their plan offerings or even leave the state altogether.

As of 2019, Colorado still has nine rating areas. The District of Columbia uses a single rating area, as do six states: Hawaii, Delaware, New Hampshire, New Jersey, Rhode Island, and Vermont.

Increased legislative oversight

In March 2016, Governor Hickenlooper signed HB1148 into law. HB1148 gives the legislative oversight committee increased authority to monitor and oversee various aspects of Connect for Health Colorado’s rule-making processes.

The law gives the legislative committee “oversight over rules and policies proposed by the health benefit exchange that affect bidding and awarding contracts, carrier and regulating carrier participation, regulating broker participation and compensation, interacting with other state agencies, managing and compensating the assistance network, or the handling of any type of appeal.

2016 rates and plans

On October 23, 2015, the Colorado Division of Insurance announced final rates for the individual and small group market in 2016 — two days after Connect for Health Colorado became the fourth state to enable browsing and window shopping on its exchange site for 2016 plans (California, Idaho, and Maryland already had 2016 plans available for browsing on their exchange sites by that point).

The overall weighted average rate increase for the individual market in 2016 was 9.84 percent, although it’s 12.14 percent if we only count plans sold in the exchange.

For the state-wide small group market, the weighted average rate increase was 3.16 percent, but it’s only 2.42 percent for plans sold in the exchange (note that in Colorado, “small group” means plans with up to 100 employees as of 2016; the state had already opted to align state regulations with the ACA, so although President Obama signed legislation to keep the definition of small groups at 50 or fewer employees, Colorado law maintains that the ACA’s small group regulations now apply to all groups with up to 100 employees).

Average rate changes by carriers and full rate sheets for each region of the state are available on the Division of Insurance website (click on “more” under the “approved plans for 2016” section).

The Division of Insurance also created an at-a-glance map of the state that shows average rate increases by area, for both the individual and small group markets.

Three carriers that offered coverage in 2015 pulled out of the market in 2016: Colorado HealthOP (more details below), New Health Ventures (Access Health Colorado), and Time Insurance Company (Time only sold off-exchange plans in 2015, and has exited the market nationwide).

But three new carriers began offering health plans in 2016 – albeit only off-exchange: Golden Rule in the individual market; Aetna Health, and Aetna Life in the small group market.

In all, there were 20 carriers offering individual and/or small group plans in Colorado in 2016, including both on and off-exchange plans. Ten of them offered individual plans in the exchange, and five offered small business plans in the Colorado SHOP exchange. There were a total of 188 individual market plans available in the exchange — up from 176 in 2015, despite the fact that two exchange carriers exited the market. There were 159 small group plans available in the exchange, up from 120 in 2015.

Rate changes for individual plans in the exchange ranged from a 4 percent increase (Kaiser; they had requested only a 2 percent increase, but the DOI increased that to 4 percent) to a 30.8 percent increase (Rocky Mountain HMO; they had requested a 34.4 percent increase, but the DOI decreased it to 30.8 percent). Because rates increased across the state, premium subsidies were larger in 2016 in order to maintain the affordability of coverage.

In the Denver area, benchmark premiums increased by an average of 32.2 percent for 2016. The benchmark plan is the second-lowest-cost Silver plan, and it’s not the same plan from one year to another. The increase in Denver (and across much of Colorado) was due to the fact that Colorado HealthOP had the lowest rates in most parts of the state in 2015, and their plans weren’t available in 2016. When compared with the average benchmark prices in other areas across the country, Denver’s rates were still very much in line with the national average.

Market share within Connect for Health Colorado

In the Connect for Health Colorado individual exchange, three not-for-profit carriers had 90 percent of the market share in 2015:

      • Colorado HealthOP, the ACA-created CO-OP, garnered almost 40 percent of the exchange market share in 2015, but is no longer available as of 2016.
      • Kaiser got 35 percent of the exchange enrollees in 2015; their average rate increase was 4 percent for 2016
      • Rocky Mountain Health Plans (also a not-for-profit carrier) had 15 percent of the exchange market share in 2015; their average rates increased by 30.8 percent. And for 2016, Rocky Mountain Health Plans opted to drop its broad-network plans along the Front Range, and instead focus on the Western Slope (Grand Junction area) where the bulk of their insureds already lived. Their membership was about 40,000 people in 2014, but declined to 26,000 in 2015.

Colorado CO-OP shut down by regulators

On October 9, 2015, Colorado HealthOP — the state’s ACA-created CO-OP — joined six other CO-OPs that had already failed (and by the end of 2015, 12 of the original 23 CO-OPs had shut down; as of 2019, there were only four CO-OPs still in operation around the country). The Department of Insurance announced that they had made the difficult decision decertify Colorado Health OP from the state-run exchange, effectively shutting down the CO-OP.

Although Colorado HealthOP was the seventh CO-OP to fail, they were the first one to publicly disagree with regulators over the shut-down. In their message to members, the CO-OP called the Colorado Division of Insurance’s decision “both irresponsible and premature” and noted that they were “astonished and disappointed by the DOI’s decision”. The CO-OP had said just the day before that they had three viable solutions for funding, and they noted that they had presented them to the DOI earlier in the week.

Colorado Health OP had said that they were on track to pay back their federal start-up loans in full and ahead of schedule, but that was derailed by the announcement on October 1 that risk corridor payments would be just 12.6 percent of the amount owed to each carrier.

Colorado’s then-Insurance Commissioner, Marguerite Salazar, noted that

“Our decision is a direct result of this [risk corridor] shortfall by CMS, and I sympathize with the HealthOP, but the Division has requirements and it has to protect consumers. It is a key function of Colorado Divison of Insurance to make sure that insurance carriers are financially stable enough to pay the claims of their policyholders. While Colorado HealthOP can continue to pay claims for the rest of 2015, we cannot allow it to sell or renew policies on the exchange for 2016.”

The DOI explained that although the CO-OP had been under DOI supervision for most of 2015, the carrier had been meeting their reserve requirements until October. But the risk corridor shortfall meant that “the Colorado HealthOP’s rainy day fund will be completely wiped out, and is in fact expected to be in the negative by $34 million by the end of the year [2015].” Because of this, the DOI felt they had no option other than to decertify Colorado Health OP from the exchange.

In a last-ditch effort to be allowed to participate in the 2016 open enrollment, Colorado HealthOP filed a lawsuit in Denver District Court on October 19, requesting an injunction and temporary restraining order against Insurance Commissioner Marguerite Salazar. But by the end of the day, following a closed-door court hearing, the case had been withdrawn (and suppressed by the court) and the CO-OP had agreed to begin the process of winding down their operations by the end of the year.

Colorado HealthOP had about 80,000 people enrolled in individual plans in 2015. All of those members had to sign up for new coverage for 2016. There were also almost 3,000 members enrolled in small group plans, and initially, the plan was that they would have to switch to new plans as of their next renewal date. But on November 17, Colorado Insurance Commissioner Marguerite Salazar announced that Colorado HealthOP’s small business plans would also terminate as of December 31, and small businesses with Colorado HealthOP plans had to secure coverage with a different carrier for 2016. Colorado HealthOP published a list of FAQs about the small group announcement.

Universal healthcare defeated in Colorado

Supporters of universal healthcare in Colorado worked for months to gather signatures in support of ColoradoCare, a universal coverage system that would have gone into effect in 2019 if voters had approved it in the 2016 election. At least 98,492 signatures were necessary in order to get the ColoradoCare proposal on the ballot next fall. On October 22, 2015, the ColoradoCare campaign announced that they had gathered enough signatures; they were delivered to the Colorado Secretary of State on October 23. Supporters were able to gather far more signatures than necessary, and on November 9, 2015 the Secretary of State confirmed that there were nearly 159,000 valid signatures. As a result, the measure was on the ballot a year later, in November 2016.

But voters resoundingly rejected the measure, with just 21 percent in favor, and 79 percent opposed.

ColoradoCare would have been enacted using a 1332 waiver under the ACA, which allows states to chart their own course for healthcare reform, as long as they do so in a way that covers at least as many people as the ACA would have, keeps coverage affordable and at least as comprehensive as it would be under the ACA, and doesn’t increase the federal deficit. If those general guidelines are satisfied, the state can receive funding from the federal government equal to what would have been provided to the state’s residents in premium tax credits, cost-sharing subsidies, and small business tax credits. In Colorado, those funds, together with Medicaid waiver funds, were projected to total $11.6 billion in 2019. Total costs to run a zero-deductible, universal coverage program in Colorado were estimated at $35.6 billion for 2019. The $25 billion difference would have been generated through a 10% income tax. Employees would have paid only a third of the total tax, with their employers kicking in the remaining two-thirds (ie, employees would have paid 3.33 percent of their gross pay).

According to Gallup polling, Colorado’s uninsured rate was 17 percent in 2013, and had dropped to 10.6 percent as of the first half of 2015. The Colorado Health Access survey found even better results, indicating that the uninsured rate in the state had dropped to just 6.7 percent in 2015. Clearly, the state is heading in the right direction, but ColoradoCare proponents wanted — and still do want — to go a step further and make coverage truly universal.

Vermont had been using a 1332 waiver to establish a single payer system starting in 2017, but those plans were abandoned in December 2014 amid concerns that the program’s costs were going to exceed projections.

Higher exchange fees in 2016

The remainder of Connect for Health Colorado’s $177 million in federal funding was exhausted by the end of 2015. The exchange had to be self-sustaining starting in 2016, and board members noted in 2015 that higher fees were necessary in order to generate sufficient revenue.

In 2014 and 2015, the fee was 1.4 percent of premiums, which was significantly lower than the fees charged by other exchanges with similar enrollment counts (generally 2.5 to 3.5 percent; in states that use the fee is 3.5 percent). In May 2015, Connect for Health Colorado recommended increasing that fee to at least 3.5 percent of premiums. They also recommended increasing the monthly individual market fee from $1.25 to $1.80 per policy (including off-exchange policies).

Both of these changes were approved by the exchange board of directors in May 2015. The exchange board was scheduled to meet next on June 8, but they moved up their schedule in order to vote on the fee increases as soon as possible after they were proposed. The fee increases went into effect January 2016; the new fee is 3.5 percent of premiums for all plans sold through Connect for Health Colorado, and $1.80 per policy per month for all private plans in the state.

Together, the two fee hikes were projected to increase revenue for Connect for Health Colorado (over FY 2015 revenue) by about $7.8 million. $5.8 million of that would come from the increased fee on policies sold within the exchange, and the remaining $2 million would be generated by the additional fee on all policies sold in the private market in Colorado.

2015 enrollment: Exchange grows, but total individual market shrinks

Colorado is one of only two states — Massachusetts is the other — where total individual market enrollment declined in 2014. Nationwide, individual market enrollment, including on and off-exchange policies as well as grandfathered and grandmothered plans, increased by 46 percent in 2014. But in Colorado, enrollment dropped by 4 percent. This was despite the fact that Colorado’s population grew by nearly 84 thousand people from mid-2013 to mid-2014 — only three states had a higher percentage growth in population.

However, the state-run exchange, Connect for Health Colorado, saw private plan enrollment grow to 141,639 people during the 2015 open enrollment period — an increase of about 10 percent over the total at the end of the 2014 open enrollment period. By April 2015, total enrollment in medical plans had grown to 145,506, and 88 percent of those enrollments had been effectuated by the beginning of May.

In July, Connect for Health Colorado released an enrollment update for 2015 with data through the end of June, and total effectuated enrollment stood at 138,502. But that included SHOP enrollments as well as people who purchased dental-only coverage. The report also included the number of effectuated medical plan enrollments with and without premium subsidies and cost-sharing subsidies (74,583 with subsidies, and 59,617 without). These are medical-only plans, so adding the two amounts together, we get 134,200 people with in-force medical coverage through the exchange as of the end of June. And that number had grown to 137,372 by the end of July.

Ninety percent of Colorado’s exchange enrollees picked nonprofit health plans in 2015: 40 percent chose Colorado HealthOP, the ACA-created CO-OP, 35 percent selected Kaiser Permanente, and 15 percent went with Rocky Mountain Health Plans. Kaiser got 46 percent of exchange enrollees in 2014, and auto-enrollment likely helped their retention, despite the fact that Colorado HealthOP offered the lowest rates in all but one of the rating areas in Colorado for 2015.

Of those who enrolled during open enrollment, more than 94,000 were returning customers, and about 47,000 were new to the marketplace in 2015. See detailed enrollment metrics such as enrollment by age group, average premiums with and without tax credits, and much more.

Connect for Health Colorado enrollment in 2014

In 2014, Connect for Health Colorado far exceeded the qualified health plan (QHP) enrollment target of 92,000 set by the Centers for Medicare and Medicaid Services (CMS). Connect for Health Colorado announced more than 129,000 people had signed up for QHPs as of April 23. Through special enrollment periods, QHP enrollment grew to 137,000 as of mid-2014. In addition, nearly 182,000 people qualified for the state’s expanded Medicaid program.

Only 60 percent of those Coloradans who purchased private insurance qualified for assistance to offset the cost. Nationally, 85 percent qualified for financial assistance. Colorado’s relatively low rate of financial assistance and the high premiums in some areas of the state explain why 40 percent of 2014 plans sold in Colorado were bronze plans compared to 20 percent nationally.

Grandmothered plans discontinued at the end of 2015

The Colorado Division of Insurance announced that transitional or “grandmothered” health plans had to be discontinued at the end of 2015. As of 2016, all individual and small group plans in the state are either fully ACA-compliant, or grandfathered (effective dates prior to March 23, 2010).

Despite the fact that many other states are still allowing grandmothered plans to remain in force until the fall of 2017, there was controversy in Colorado over the fact that grandmothered plans were allowed to renew at all after January 1, 2014. Lawmakers in Colorado passed a bill in 2013 (House Bill 13-1266) that aligned Colorado healthcare law with the ACA. It required Colorado plans to be compliant with the ACA as of their issue or renewal date starting on January 1, 2014. Ultimately, the Division of Insurance used their regulatory power (also provided for in HB 1266) to allow the renewal of grandmothered plans in 2014, but there were questions as to whether or not they overstepped their bounds in doing so.

Background on Colorado’s exchange

Then-Governor John Hickenlooper informed the federal government in October 2012 that Colorado intended to run its own health insurance marketplace, and the state received federal approval of its plan in December 2012.

Unlike politicians in most other states, Colorado legislators voted on a bipartisan basis to move ahead with a state-run exchange. Legislation to establish the state marketplace passed in May 2011 and was signed by Hickenlooper in June 2011. In early 2013, the marketplace was given the brand name “Connect for Health Colorado.”

Colorado’s marketplace is governed by a 12-member board and led by CEO Kevin Patterson.

In January 2017, S.B.3 was introduced in Colorado in an effort to eliminate the state-run exchange and switch to The legislation was introduced by Senator Jim Smallwood (R, District 4) and Representative Patrick Neville (R, District 45). On February 7, it passed the Senate Finance Committee with a 3-2 vote, and was referred to the Committee on Appropriations. But on May 8, Smallwood killed the bill, and it did not proceed in 2017.

Colorado health insurance exchange links

Connect for Health Colorado
855-PLANS-4-YOU (855-752-6749)

State Exchange Profile: Colorado
The Henry J. Kaiser Family Foundation overview of Colorado’s progress toward creating a state health insurance exchange.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.