Health insurance premiums rising, but choices available

Marguerite Salazar
Marguerite Salazar

Health insurance premiums will increase on average 7 percent in Colorado in 2016, according to statistics compiled by the state division that reviewed and approved plans for the coming year.

The Colorado Division of Insurance, a division of the Department of Regulatory Agencies, has approved a total of 1,073 insurance plans from 20 carriers offering health care coverage to consumers and small businesses for 2016.

That presents a lot of options, said Marguerite Salazar, commissioner of insurance. “Because we have so many choices, I encourage consumers to look beyond monthly premiums to consider deductibles and other benefits. A plan has to fit both the health and financial needs of a consumer.”

Premiums for individual policies will increase an average of nearly 10 percent in 2016, while premiums for small group plans for employers with two to 99 employees  will increase an average of more than 3 percent.

The increased premiums reflect the rising cost of health care, Salazar said. Since the latest open enrollment period is only the third under federal health care reform legislation, it’s the first time carriers have had a full year of information in which to consider in calculating rates, she added. “They are still trying to figure out what consumers want in terms of plans, deductible levels and services at a price that attracts enrollment, but allows the carrier to keep the lights on and pay their bills.”

Premiums also reflect the cost of health care in each of the nine geographic rating areas in Colorado, Salazar said. “The division doesn’t regulate the cost of health care, but everyone involved in health care in Colorado needs to work on bringing these costs down.”

Because premiums vary by carrier, geographic area and type of plan, Salazar encouraged consumers to research available plans in their areas to determine the best options.

Consumers who purchased through Connect for Health Colorado, the state health insurance exchange, in 2015 who aren’t eligible for tax credits will see an average increase of 12 percent if they simply renew their current plan for 2016.

Those who consider other plans could see an average increase of only 4 percent if they choose the lowest cost plan available in the same tier. Those eligible for tax credits could realize even greater savings, lowering their premiums by 46 percent on average, if they were to select the lowest cost plan in the same tier.

Federal tax credits and other federal financial assistance are only available for coverage purchased through Connect for Health Colorado.  Eligibility depends on household income. Tax credits are calculated based on income, age and the cost of insurance.