QHP enrollment exceeds 157k
157,317 people had enrolled in private health plans (QHPs) through Connect for Health Colorado by February 2, 2016. That was an increase of more than 3,700 people since January 31, when open enrollment ended. However, there’s an ongoing special enrollment period – through the end of February – for people who lost coverage at the end of December (more details below).
Total enrollment for 2016 is significantly more than the 141,639 people who enrolled in QHPs through the exchange during the 2015 open enrollment period.
As of early January, about 39,000 former CO-OP members who had coverage through the exchange in 2015 had not yet obtained new coverage through the exchange for 2016 (more details below), but they are among the people who can still enroll as late as February 29.
The special enrollment period also applies 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). People who had grandmothered plans in Colorado until the end of December are also eligible to enroll in a new plan through the end of February, as all grandmothered plans in the state terminated on December 31 (more details below).
In addition to QHP enrollments, 54,447 people enrolled in Medicaid through the exchange from November 1 to January 31, 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. Including private plans, Medicaid, and CHP+, Connect for Health Colorado’s total enrollment gains so far since November 1 are more than 211,000 people.
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).
Smooth open enrollment, but still a long way from target
Connect for Health Colorado has added a feature that directs callers to brokers who can assist them during open enrollment when call center volume is at its highest. The exchange credits the broker assistance program with helping to make the 2016 open enrollment period smoother than the previous two years.
The exchange has been aiming for 217,000 people enrolled in private health plans by mid-2016. That’s the mid-level projection; on the low end, the exchange is targeting 195,000 enrollees in private plans by June. Their success will now depend largely on how many more people enroll in February during the special enrollment period that applied to more than 150,000 people who lost coverage in the state at the end of December.
Now that open enrollment for 2016 is over, enrollment will only be possible (on or off the exchange) for the rest of the year for people who have a qualifying event, although Native Americans can enroll year-round, as can anyone eligible for CHP+ or Medicaid. Loss of coverage is a qualifying event, which is why everyone who lost coverage on December 31 still has until the end of February to pick a new plan (note that coverage is not retroactive in that case – people who enroll in a new plan in February due to loss of coverage in December will have a new plan effective March 1, but will have a two month gap without coverage in January and February). .
In addition to individual enrollments, there are 377 small businesses with coverage through Connect for Health Colorado’s SHOP exchange, covering about 3,000 employees state-wide. In 2014 and 2015, SHOP coverage was available to businesses with up to 50 employees, but it became available to businesses with up to 100 employees as of January 2016. By mid-2016, the exchange’s enrollment target ranges from 686 to 839 small groups.
Thousands of people needed new plans for January
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 December.
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 means 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 must pay significantly more to maintain health insurance coverage this year).
The exchange is hoping to enroll more of the former CO-OP members by the end of February. Loss of coverage is a qualifying event that triggers a special enrollment period (SEP) that extends for 60 days after the loss of coverage. That means everyone in Colorado who lost coverage under a grandmothered plan, a CO-OP plan, an has until the end of February to pick a new plan for 2016. And the exchange has verified that they will grant March 1 effective dates to anyone who enrolls in February during the special enrollment period. So people who lost coverage on December 31 can enroll in a new plan as late as February 29 and their coverage will be effective March 1.
Should voters decide on exchange fees?
In January 2015, Republican Senators Kevin Lundberg and Langhorne Cias introduced Senate Bill 2. The legislation contends that Connect for Health Colorado’s market-wide assessment (which also applies to private plans sold outside the exchange) is a tax. Under Colorado law, new taxes require voter approval.
If SB2 were to pass, voters will decide in November 2016 whether Connect for Health Colorado can continue to generate revenue from plans sold outside Connect for Health Colorado.
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 in 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 applies 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 has 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 have 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 are 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 are 20 carriers offering individual and/or small group plans in Colorado in 2016, including both on and off-exchange plans. Ten of them offer individual plans in the exchange, and five offer small business plans in the Colorado SHOP exchange. There are a total of 188 individual market plans available in the exchange – up from 176 in 2015, despite the fact that two exchange carriers have exited the market. There are 159 small group plans available in the exchange, up from 120 in 2015.
Rate changes for individual plans in the exchange range 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 have increased across the state, premium subsidies are larger in 2016 in order to maintain the affordability of coverage. The average monthly subsidy in Colorado in 2015 was $221, and it’s expected to increase to $328 in 2016.
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) is due to the fact that Colorado HealthOP had the lowest rates in most parts of the state in 2015, and their plans aren’t available in 2016. When compared with the average benchmark prices in other areas across the country, Denver’s rates are 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 in 2016.
- Kaiser got 35 percent of the exchange enrollees in 2015; their average rate increase is 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 has opted 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 are. Their membership was about 40,000 people in 2014, but declined to 26,000 in 2015.
Due to the exit of Colorado HealthOP, the smaller service area offered by RMHP, and the small rate increase on Kaiser plans, it’s likely that Kaiser has the bulk of the market share among Connect for Health Colorado enrollees for 2016.
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). 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 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 .” 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.
Increasing eligibility verification
In December 2015, the Office of the Inspector General released a report indicating that Connect for Health Colorado needed some additional eligibility verification procedures, based on a sample conducted in 2014. Although the exchange was effective in determining eligibility for premium subsidies, their eligibility verification was inadequate when enrollees weren’t applying for financial assistance. And the OIG report also noted that the exchange needed to obtain OPM or non-employer-sponsored insurance data from the Data Hub before enrolling people in qualified health plans through the exchange. Connect for Health Colorado agreed with OIG’s recommendations.
Universal healthcare coming to Colorado?
Supporters of universal healthcare in Colorado worked for months to gather signatures in support of ColoradoCare, a universal coverage system that would go into effect in 2019 if approved by voters 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, 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, the Secretary of State confirmed that there were nearly 159,000 valid signatures. As a result, the measure will be on the 2016 ballot and the fate of the program will rest with Colorado voters.
ColoradoCare would be 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, are projected to total $11.6 billion in 2019. Total costs to run a zero-deductible, universal coverage program in Colorado are estimated at $35.6 billion for 2019. The $25 billion difference would be generated through a 10% income tax. Employees would pay only a third of the total tax, with their employers kicking in the remaining two thirds (ie, employees would pay 3.33 percent of their gross pay).
According to Gallup polling, Colorado’s uninsured rate was 17 percent in 2013, and has 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 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 last December amid concerns that the program’s costs were going to exceed projections.
2016 fiscal year budget
On June 8, the Connect for Health Colorado board approved a budget for the 2016 fiscal year, which began in July 2015. Although it incorporates increased sales projections and higher fees, exchange leadership is bracing for operating losses of $4.6 million a potential $13.3 million deficit in the 2016 fiscal year.
The exchange is projecting $40.3 million in revenues, and nearly $53.7 million in expenses, including operating costs as well as $8.8 million in “additional IT expenses.” Previous exchange leaders had stated that Connect for Health Colorado could operate on a $26 million annual budget, but that has turned out to be a significant under-estimation.
Lawmakers in Colorado are also considering using Section 1332 waivers to change how Connect for Health Colorado is structured, but there hasn’t yet been any consensus in terms of how to change it, or the scope of those changes.
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 must 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 Healthcare.gov 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 on May 14. 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 (Senate Bill 2, described above, would allow voters to determine whether Connect for Health Colorado can continue to impose a fee on plans sold outside the exchange).
Together, the two fee hikes are 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.
No money from Medicaid, but that could change
Unlike other state-run exchanges, Connect for Health Colorado does not receive compensation from CMS for enrolling applicants in Medicaid, despite the fact that the exchange enrolled nearly 80,000 people in Medicaid during the 2015 open enrollment period (Medicaid enrollment continues year-round). CEO Kevin Patterson is working to change that, and hopes to secure millions of dollars in Medicaid reimbursements to supplement existing revenue sources for the exchange.
The four other state-run exchanges with similar enrollment totals all receive at least a third of their funding – and as much as more than half of their funding – from Medicaid. But Connect for Health Colorado doesn’t get any funding from Medicaid (and agents/brokers who enroll people in Medicaid through Connect for Health Colorado don’t receive any compensation, unlike other states).
The exchange can request reimbursement from CMS for expenses incurred to enroll people in Medicaid, and the 2016 revenue projection includes $2.5 million in recouped funds from CMS. That still pales in comparison with the $15 million to $29 million that other similarly-sized exchanges are reimbursed annually by Medicaid.
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 during 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 includes 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.
New leadership and comprehensive audit
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.
Governor Hickenlooper signed Senate Bill 19 into law in April 2015, allowing for a comprehensive performance audit of Connect for Health Colorado. The evaluation will be much more than a standard financial audit, and includes a “complete and thorough audit of the operation of the exchange.” But as of late 2015, the audit had not yet been performed.
The Connect for Health board approved a $66.4 million budget for the fiscal year running from July 1, 2014, to June 30, 2015. The budget included a $1.25 per-policy-per-month assessment on insurance carriers (this has increased to $1.80 in 2016), which officials say will allow the marketplace to maintain an operating reserve of $13 million. The assessment applies to all policies, not just those sold through the marketplace. According to Health News Colorado, the 2015 budget included:
- $29.5 million for technology
- $13.6 million for the customer service center
- $7 million for salaries, legal and accounting fees, and travel
- $6 million for the assistance network
- $4.8 million for marketing, communication and outreach
- $2.3 million for consulting and operations
However, the exchange went back to the board repeatedly for more money.
In September 2014, the board approved $3.5 million for additional technology licensing fees.
In November 2014, Connect for Health sought a $4 million increase for the service center, explaining that the money was needed to handle higher than anticipated call volume due to a big change in subsidy amounts between 2014 and 2015. The board did not immediately approve the requested increase. Rather, it approved $875,000 at the time and an additional $300,000 in December.
In January 2015, the Connect for Health board of directors approved $322,000 in emergency spending to address enrollment system problems. The emergency spending was needed to fund workarounds to help people complete the enrollment process, but did not address the underlying problem.
In early February, Connect for Health requested $2.8 million — again for the service center. The board deferred making a decision.
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.
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 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
Gov. 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, 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.
A limited performance audit conducted by the Colorado Office of the State Auditor in 2014 found problems with how Connect for Health Colorado handled its finances. The audit found that Connect for Health Colorado lacked adequate financial controls, such as not properly tracking payments and not following federal requirements for administering contracts. Auditors made four recommendations for improvements. Connect for Health officials accepted the recommendations and said they would implement them.
Citing the 2014 audit findings, the Colorado Senate in early 2015 passed two bills for increased oversight of the exchange. SB 19 authorized an in-depth performance audit, while SB 52 authorized committee review of any proposed bonuses for Connect for Health staff members. SB 19 passed the House 64-1 on March 16, but a House committee rejected SB 52 in late February.
HB 1066 did not make it out of the House Health, Insurance and Environment Committee. That bill sought to end operation of Connect for Health Colorado.
Colorado health insurance exchange links
Connect for Health Colorado
State Exchange Profile: Colorado
The Henry J. Kaiser Family Foundation overview of Colorado’s progress toward creating a state health insurance exchange.