Health Care In The States

11 Insurers Want To Play Ball In Colorado’s Marketplace

By Phil Galewitz

May 22nd, 2013, 2:21 PM

Corrected at 6:00 p.m. to reflect that 11 insurers, rather than 17 have submitted policies to sell in the state’s new online health insurance marketplace.  The larger number includes those proposing to sell both inside and outside the online marketplace.

Colorado became the latest state Wednesday to post proposed health insurance plans for its new online marketplace, which is slated to begin enrolling people in coverage Oct. 1.

What stands out is the number of plans being proposed.  A total of 11 insurers are seeking approval to market about 250 health plans to individuals and small groups  in the state’s online marketplace under the federal health care overhaul.

While Colorado regulators said they are encouraged by the number of carriers who want to participate—hoping competition will help keep down premium costs—it worries agents.

“I would say that number has to come down or people are going to be overwhelmed by the choices they have,” said Marie DeWolf, who runs an insurance agency in Greeley, Colo.

The online marketplaces are one of the key ways the health law expands coverage to millions of people not offered coverage by their employers. Consumers will be able to compare plans on the websites and find out whether they might be eligible for government subsidies to help defray the cost of premiums.

The Colorado marketplace called Connect for Colorado has not limited how many plans carriers can offer for each category of standardized coverage. Some other states, including California, Connecticut, Massachusetts, Maryland, Nevada, New York and Oregon, are limiting the number of plans each insurer can offer, according to Avalere Health, a consulting firm.

A few years after the federal government started the Medicare prescription drug program, it also limited the number of plans each carrier could offer in an effort to reduce consumer confusion.

Colorado Insurance Commissioner Jim Riesberg said a preliminary review shows that monthly proposed premiums for the new plans “vary widely,” depending on what portion of medical expenses the plan will pay and what portion consumers will be responsible for through co-pays and other out-of-pocket costs.

He also noted that some of the proposals do not meet the  requirements of the law.

“We are very encouraged by the number of health insurance carriers that want to participate in Colorado,” Riesberg said in a statement. “As the regulatory agency charged with ensuring a competitive marketplace for health insurance companies in Colorado, we believe that a greater number of carriers means more choice for Colorado residents.”

In the next two months,  he said his staff will examine the plans to make sure they meet new requirements for essential health benefits, such as hospitalization, maternity, newborn care and wellness services.  Plans must be certified as complying  with the law before they can be sold.

4 Responses to “11 Insurers Want To Play Ball In Colorado’s Marketplace”

  1. Lena Conway says:

    Bravo to those insurers who are taking actions on creating an exchange. This helps them to bring in more revenue on the 30 million uninsured. But how competitive their premium rates wih each other to make it affordabl to most participants is the main question. Setting high deductibles and out-of-pocket maximums will lower the premium, but who can afford dishing out 20-30K up front before the rest of the expense for their hospitalization will be covered under the plan? The financial burden with such a plan is too high for most middle class people.

    I am a group insurance underwriter for 20 years. The way I see it, instead of forcing people to buy a high deductible and out-of-pocket plans because that’s all they can afford, insurers should try to average out the cost increase under the affordable act over a period of 5 or 6 years into the future, While the claim cost in 2014 -2017 will go up, the preventive services paid at 100% could help save some medical / hospital expenses. In 2018-2020, the claim cost may come down to a reasonable level. If insurers proposed a reasonable deductible and out-of-pocket plan with a 5 or 6 year premium rate guarantee, where the annual premium rate increase is the average of the entire period., they will keep people on their books and collect the premium for the entire period to make up for the losses in the fist 3 years. If insurers were reluctant to take losses until the time things gets back to equilibrium after the 30 million uninsured people get into the system, they may end up taking losses on their existing book of business plus not getting enough revenue in to stay strong in the long term.

    In addition, forget about adding wellness programs. Wellnss programs do not help lower medical cost. It’s a nice suggestion but people cannot be told what they must do to stay healthy. Therefore, insurers and hospitals must get together to provide quality care more efficiently and less costly. No more $8 piece of bandaid. These are not normal times. The health industry now has a chance to change things for the better for all Americans though the Affordable Care Act. Make it happen and stay in control. Or screw it up and turn the health care system into a government run universal health system. It’s their choice.

    Lena Conway
    Naperville, IL

  2. Mike VanMeter says:

    Ms. Conway,

    Appreciate reading your thoughts, but under the ACA annual out of pocket expenses are capped at either $6,350 for individuals, or $12,700 for families, and that number will be much lower for many due to premium subsidies (tax credits applied at time of policy purchase to reduce monthly premiums) for those with a household Federal Poverty Level (“FPL”) between 100% and 400% (or between roughly $24,000 and $96,000 for a family of four in 2013), and cost-sharing subsidies (government subsidies paid directly to insurers to help increase the Actuarial Value, decrease copays, and/or decrease coinsurance) for those with a household FPL of between 100% and 250% (or between roughly $24,000 and $60,000 for a family of four in 2013). Making healthcare affordable for those in the Individual market is a key attribute of the ACA.

    Michael VanMeter
    Chicago, IL

  3. The ONLY way to reduce health care expenses is for EVERYONE to have a stake in their own INDIVIDUAL plan. Group plans of any size have ruined the US by making those employees dependent on their employer, disengaging them from the true cost of healthcare, consequently a prime reason why we are in debt. And Michael you are in a pipe dream if you think that 30 million people who haven’t paid for insurance, ever, will, even with premium assistance purchase a plan. Social engineering, even with a TAX penalty will not work, and a great many of us who have been in the business, and know human behavior will attest to that fact. My individual policy holders now pay less than most of the generous subsidized plans currently published between 250-400%.

  4. Don Levit says:

    I think Lena has a good point in encouraging insurers to price products to keep business on the books for 6 years, or even longer.
    Insurers need to develop policies in which everyone benefits over the long run.
    Frank makes a good point in individuals having a stake in their own individual plan.
    In our patented design, this is exactly what happens in group insurance, as well as individual insurance.
    By paying more for a rider, $300 a month, the individual builds paid-up benefits for himself, every month.
    These paid-up benefits allow his premium to decrease while his deductible rises to the paid-up balance.
    While the ACA limits deductibles to $4,000 per family, we are applying for a waiver on our plan with the HHS, whose paid-up benefits (and deductibles) build to $25,000 over 36 months and $50,000 over 60 months, assuming no claims are made. This allows the individual (even in a group insurance environment) to lower his premiums 60-80%.
    Don Levit