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Colorado health insurance

Individual market enrollment runs from November 1, 2019 to January 15, 2020; Progress continues on public option that's expected to be available by 2022

Health insurance in Colorado

Colorado has long been a leader in health reform

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 long been a leader in terms of health care reform. Before the ACA implemented reform on a federal level, Colorado had already made maternity coverage mandatory in the individual market, and had banned gender-based premiums.

Colorado became the second state in the nation to actively pursue single-payer health care, with Amendment 69 appearing on the 2016 ballot. However, voters rejected the push for single-payer by a wide margin (Vermont was the first state to implement a plan to achieve single-payer, but they abandoned that path in December 2014).

Colorado is implementing a reinsurance program as of 2020, joining a growing number of states that are using 1332 waivers to obtain federal pass-through funding for reinsurance to stabilize the individual market. Individual health insurance premiums in Colorado are dropping by an average of more than 18 percent in 2020, thanks to the reinsurance program.

Colorado’s uninsured rate dropped by nearly half from 14.1 percent in 2013, to 7.5 percent in 2017. The Colorado Health Access Survey found an even lower uninsured rate — just 6.5 percent — in 2017.

Public (“state”) option expected to be available statewide by 2022; regulators recommend using 1332 waiver to capture savings and use it to benefit the subsidized population

Colorado enacted legislation in 2019 that directed the state to explore ways to create a public option health insurance program that could offer a lower-cost alternative for people who buy their own health insurance. That process was ongoing throughout the summer of 2019, with numerous public meetings around the state.

In October 2019, the Colorado Division of Insurance (DOI) and the Colorado Department of Health Policy and Financing (HCPF) published a draft proposal for what is being called a state option (as opposed to a public option). After considering public comments and stakeholder feedback, a final proposal was published in mid-November.

The final proposal is extensive and detailed, although some aspects of the program are yet to be determined. But here’s a summary of the state is proposing, some of which differs from the draft proposal:

  • The State Option will be available as of 2022, with premium savings of 9-18 percent (and potentially greater savings if the state secures a 1332 waiver that allows Colorado to harness the premium subsidy savings that stem from the lower premiums; these additional savings could be used to provide additional benefits, such as dental coverage or additional cost-sharing reductions and/or premium subsidies; this is crucial and is addressed in more detail below).
  • It will offer coverage in only the individual market (ie, people who buy their own plans, as opposed to getting coverage from an employer) initially, but potentially expand to the group market in future years — possibly including the large group market.
  • Plans will be available statewide, including in the 22 counties that have only one participating exchange insurer for 2020.
  • The State Option will be overseen by DOI and HCPF, but offered by private insurers who would administer the program and take on the risk involved with providing coverage. Taxpayers will not fund the plans, and will not bear any risk.
  • State Option plans will be offered by all health insurance carriers that offer individual market coverage in Colorado. The draft proposal called for mandatory participation by insurers that have at least a certain number of members in the individual, small group, and/or large group markets. But the final proposal recommends more of a voluntary approach, with individual market insurers offering plans and the state only stepping in to mandate participation if a given area were to have fewer than two participating insurers offering plans.
  • Plans will be available via Connect for Health Colorado as well as directly through the insurers who offer the State Option plans.
  • Reimbursement rates for hospitals would be set by a “public and transparent formula” on a hospital-by-hospital basis. The draft proposal had called for hospital reimbursements to be between 175-225 percent of Medicare rates — as opposed to the current 289 percent of Medicare rates currently paid by private insurers in Colorado (the proposal notes that hospital reimbursements in Colorado are higher than the national average). But the final recommendation is more nuanced, and clarifies that hospital pricing varies considerably from one area of the state to another, as do hospital margins.
  • At least 85 percent of premiums collected by State Option plans will have to be used for enrollees’ medical care (more stringent than the ACA’s 80 percent medical loss ratio requirement for individual market plans).
  • The plans will be ACA-compliant qualified health plans with standardized benefits. Preventive care will be pre-deductible (as is the case for all ACA-compliant individual market plans) but primary care and behavioral health care will also be pre-deductible. There is no mention of an HSA-qualified plan being among the proposed standardized benefit designs, although that could come later in the process.

Ensuring hospital participation in the program is essential, although Colorado regulators have indicated that if hospitals don’t embrace the program, their participation would become mandatory.

The state anticipates drafting a 1332 waiver proposal in 2020, that would be submitted to the federal government by the end of 2020 or beginning of 2021, in order to obtain federal pass-through funding. The lower premiums for the State Option would result in smaller premium subsidies in Colorado; the 1332 waiver would allow the state to utilize the savings, instead of letting the federal government keep the savings; the same approach is being used with Colorado’s reinsurance program.

The State Option proposal estimates that total premium subsidies in Colorado in 2022 would be $89 million lower with the State Option in place than they would be without it (again, this is because the State Option would be expected to take over the benchmark spot, meaning that smaller subsidies would be necessary in order to keep that plan affordable; subsidies would everyone would thus be smaller, regardless of which plan they select).

Some Colorado residents who receive premium subsidies are seeing sharp increases in their after-subsidy premiums for 2020 due to the state’s new reinsurance program and the associated reduction in premium subsidies. The same thing could be expected to happen again in 2022 as a result of the State Option: It would provide a lower-cost option for people who pay full-price for their coverage, but could result in higher net premiums for people who get premium subsidies.

The proposal for the State Option addresses this, with regulators making a “strong recommendation” that at least 80 percent of the savings recaptured by the state via a 1332 waiver be used to help people who qualify for premium subsidies (this makes sense, as the lower costs of the State Option already directly help people who don’t get premium subsidies). The recommendations include using the money to enhance benefits (adding dental coverage, for example), reducing out-of-pocket costs via enhanced cost-sharing reductions (including the possibility of extending them to people with higher incomes), and/or additional premium subsidies to make coverage more affordable.

The Colorado health marketplace

Colorado utilizes a state-run health insurance exchange. While there are seven insurers participating, which is relatively robust compared with much of the country, coverage tends to be localized and plan availability is concentrated in urban areas.

In 14 of the state’s 64 counties, those who shop the state’s exchange have a single carrier option (Anthem Blue Cross/Blue Shield) in 2019. That will grow to 22 in 2020.

The counties with the most options, Denver, Jefferson, and Arapahoe, have six carrier options each in 2019. Colorado Choice/Friday Health has been expanding their coverage area in the state, and is offering plans in all nine rating areas for 2019 (the plans are only available in select counties in three of those rating areas).

Colorado implemented a special enrollment period that extended the length of the state’s enrollment period for 2019 coverage to 2½ months. The state’s insurance division has implemented regulations that make the extension permanent, so open enrollment will run for 2.5 months in future years as well.

Colorado exchange rates and plans for 2020

Open enrollment for 2020 health plans will run from November 1, 2019 to January 15, 2020 in Colorado. Eight individual market insurers will offer plans in the state’s exchange for 2020, with average premiums (before any subsidies are applied) that are more than 18 percent lower than average 2019 premiums. The rate decrease is due to the state’s new reinsurance program, which is being implemented as of 2020. For people who get premium subsidies, the subsidy amounts will fluctuate to keep pace with premiums. But for those who don’t get subsidies, average rates will decrease in 2020:

  • Anthem: A 24.2 percent decrease for HMO Colorado, and a 12.5 percent decrease for Rocky Mountain Hospital & Medical Service, Inc.
  • Bright Health: 19.5 percent decrease (Bright will join the exchange in Summit County in 2020 via the Peak Health Alliance)
  • Cigna: 22.5 percent decrease 
  • Denver Health Medical Plan: 29 percent decrease
  • Friday Health: 26 percent decrease 
  • Kaiser: 10.3 percent decrease (Kaiser will no longer offer individual plans in Eagle and Summit counties as of 2020)
  • Rocky Mountain HMO: 33.5 percent decrease 
  • Oscar: New to Colorado for 2020; plans will be available in the Denver metro area.

Colorado insurers are continuing to add the cost of cost-sharing reductions to silver plan premiums for 2020, just as they did for 2019, resulting in disproportionately large premium subsidies. The result is that most enrollees with premium subsidies will continue to have smaller after-subsidy premiums in 2020 than they had in 2018.

Colorado enrollment in qualified health plans

170,325 people enrolled in private plans through Colorado’s exchange during open enrollment for 2019 coverage. That was an increase from 165,777 enrollees the year before.

For comparison, 125,402 Colorado residents signed up for coverage during the first open enrollment period, for 2014 coverage. During the 2015 open enrollment period, 140,327 Coloradans enrolled in QHPs – 28 percent were new consumers. That year, 90 percent of enrollees selected nonprofit health plans from Colorado HealthOP, Kaiser Permanente and Rocky Mountain Health Plans.

Since then, Colorado HealthOP has closed (details below) and Rocky Mountain Health Plans has reduced its coverage area for individual market plans to only Mesa County (Grand Junction). But Kaiser continues to be a key player in the state’s individual market.

Read more about the Colorado health insurance marketplace.

Colorado CO-OP ceases operation

Colorado HealthOP is no longer offering coverage. The nonprofit was a Consumer Operated and Oriented Plan (CO-OP) founded through a $72.3 million federal loan.

The CO-OPs formed under the Affordable Care Act were intended to increase competition in the individual and small-group insurance markets while providing consumers with affordable, high-quality options. Colorado was one of 22 states that were home to an ACA CO-OP. However, 12 of these CO-OPs, including Colorado HealthOP had announced their closure by early November 2015. And by 2019, only four were still operational, offering plans in five states.

Grandmothered plans terminated

Colorado required all grandmothered (transitional) plans to terminate by the end of 2015. There are still grandfathered plans in the state, but all other individual and small-group plans are now ACA-compliant.

Colorado and Medicaid expansion

Colorado is among the 31 states and the District of Columbia that have expanded Medicaid under the ACA. The expansion extends Medicaid eligibility to most nonelderly adults at or below 138 percent of the federal poverty level.

By mid-2018, more than 400,000 people had gained coverage under Colorado’s expanded Medicaid. From late 2013 to July 2018, enrollment in Colorado Medicaid and CHP+ increased by 71 percent to about 1.34 million. From late 2013 to July 2018, Colorado was tied with Alaska for the nation’s fourth-largest percentage increase in Medicaid enrollment. Only Kentucky, Nevada, and Montana had larger percentage increases in their Medicaid/CHIP populations.

Note that individuals can sign up for Medicaid, or lose coverage, if their eligibility changes, anytime throughout the year, so enrollment totals fluctuate each month.

Learn about Colorado’s Medicaid and Child Health Plan Plus (CHP+) programs at the Colorado Department of Health Care Policy & Financing website, and learn about Colorado’s Medicaid expansion in our overview.

Read more about Medicaid expansion in Colorado.

Short-term health insurance in Colorado

Colorado has extensive state regulations pertaining to short-term health insurance plans. Under longstanding regulations, short-term health plan terms are limited to six months in the state, and cannot be renewable.

In addition, short-term policies cannot be purchased by anyone who has had coverage under more than one short-term plan in the prior 12 months. That means a Colorado resident could buy a short-term plan with a six-month term, and then buy one more short-term plan after the first ends. But after that, they’d have to wait at least six months before being able to purchase a third short-term plan.

Those rules predate the Obama and Trump Administrations, but Colorado drastically tightened its regulations for short-term plans as of 2019. Starting in April 2019, there are no longer any short-term plans for sale in the state. That’s because Colorado now requires short-term plans to be guaranteed-issue, cover the ACA’s essential health benefits, and cap premiums for older enrollees at no more than three times the premiums for younger enrollees.

Read more about short-term health insurance in Colorado.

Colorado legislators’ positions on the Affordable Care Act

In 2009, Colorado Sens. Mark Udall and Michael Bennet – both Democrats – voted yes on the Affordable Care Act. Colorado’s five Democratic House members also voted yes, while the other two representatives, both Republicans, voted no.

The current Colorado congressional delegation includes Senators Michael Bennett (Democrat) and Cory Gardner (Republican). Bennett supports the ACA, while Gardner opposes it. As of 2018, Colorado has seven representatives in the U.S. House: three Democrats, and four Republicans. Support for the ACA is split along party lines in the state’s House delegation.

At the state level, Colorado was one of the only states that moved in a bipartisan manner to establish a state-run health insurance marketplace. Gov. John Hickenlooper, a Democrat, signed legislation authorizing the marketplace in 2011. The state marketplace is called Connect for Health Colorado. The state also adopted Medicaid expansion under the Affordable Care Act. By 2018, more than 400,000 people in Colorado had gained coverage as a result of Medicaid expansion.

Colorado’s high-risk pool

Before the ACA reformed the individual health insurance market, coverage was underwritten in nearly every state, including Colorado.  People with pre-existing conditions were often unable to purchase coverage in the private market, or were only eligible for policies that excluded their pre-existing conditions or charged them premiums that were significantly higher than the base rate.

CoverColorado was created in 1991 to provide an alternative for people who were not able to get comprehensive coverage in the private market because of their medical history.

One of the primary reforms ushered in by the ACA was guaranteed issue coverage in the individual market. An applicant’s medical history is no longer a factor in eligibility, which means that high-risk pools are no longer necessary the way they once were.

CoverColorado stopped enrolling new applicants at the end of 2013, and encouraged all existing members to transition to a new plan by December 23, 2013, in order to have private coverage (or Medicaid, if eligible under the expanded guidelines in Colorado) by January 1, 2014. For those who were unable to secure new coverage by the beginning of 2014, CoverColorado plans remained in force until the end of March, at which point the program ceased operations.

Any members who were still covered by the plan at the end of March were eligible for a 60-day special enrollment period at that point, allowing them to select a new plan, on or off-exchange.  For a while, the CoverColorado website included a touching Wordle comprised of compliments submitted by members during the final months the plan was operational.

Medicare coverage in Colorado

By August 2018, Colorado Medicare enrollment reached 878,937 people, which is about 15.4 percent of the state’s population. Nationally, about 18 percent of the population is enrolled in Medicare. As of 2015, 87 percent of Colorado’s Medicare recipients qualified based on age alone, while the other 13 percent were on Medicare as the result of a disability.

Medicare paid about $8,419 per Colorado enrollee in 2017. The national average was $9533 per enrollee.

Coloradans who want additional benefits beyond what original Medicare offers can select a Medicare Advantage plan instead. 37 percent of Colorado Medicare beneficiaries had Medicare Advantage plans instead of traditional Medicare plans in 2017, compared with 33 percent of Medicare beneficiaries nationwide.

About 650,000 Coloradans with Medicare were enrolled in Medicare Part D plans in 2018 – 344,288 in  stand-alone prescription drug coverage and 306,062 in Part D coverage integrated with their Medicare Advantage coverage.

Colorado health insurance resources

Colorado health reform at the state level

Lawmakers in Colorado tried in 2017 and again in 2018 to tackle the problem of unaffordable health insurance premiums for people who don’t qualify for ACA premium subsidies. H.B.1235, a bipartisan bill, passed in the House in April 2017. But it failed in Committee in the Senate the following week.

In 2018, H.B.1205  met a similar fate. In both cases, the legislation would have provided state-based premium assistance to people with income between 400 percent and 500 percent of the poverty level (ie, a little too high for ACA subsidies) who live in the three most expensive health insurance rating areas in the state (the mountains, including Grand Junction, and the eastern plains) and pay more than 15 percent of their income for health insurance purchased through the exchange. (The bill in 2018 would have set the threshold at 20 percent.)

For the time being, however, there is no assistance available to these residents, as the state-based program was not enacted.

Colorado lawmakers also considered a bill to implement a reinsurance program in 2018, and although it passed in the House, it failed in the Senate. Several other states have implemented, or will soon implement, reinsurance programs to stabilize their individual markets and reduce premiums. Colorado may do so in a future legislative session, but funding for the state’s portion of the cost was a stumbling block in 2018.

Colorado’s House has a Democratic majority, while the Senate has a Republican majority.

See the bottom of this page for a summary of other state-level health reform legislation.

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.