By Katie Kerwin McCrimmon and Diane Carman
Consumers are pressing for more affordable insurance as carriers unveiled proposed 2015 rates that range from 22 percent cheaper than this year’s premiums to nearly 18 percent more expensive.
Denver Health proposed hiking its rates by 17.5 percent, the largest proposed increase in the state, according to analysts at the Colorado Consumer Health Initiative (CCHI), a consumer advocacy group that is scrutinizing proposed insurance rate hikes and could protest increases it considers unwarranted.
Kaiser Permanente, which captured nearly half of the new customers who bought insurance on Colorado’s exchange for this year, proposed a 7 percent increase.
Colorado’s mountain resort areas are home to the highest insurance premiums in the country this year. (Click here to read “Colorado ski towns priciest in nation for insurance, no help from feds) New zones for health insurance pricing appear to be driving costs down in resort areas, but increasing them in other rural parts of the state. The resort areas that included Summit, Eagle, Garfield and Pitkin counties would have slightly lower rates next year under most carriers’ proposals, while other parts of western Colorado will see somewhat higher rates, according to CCHI’s preliminary analysis. On the Eastern Plains, rates in the north would decrease by about 20 percent while rates in southern Colorado would go up.
Insurance carriers submitted their proposed rates earlier this month. Colorado’s Division of Insurance unveiled them Monday and consumer advocates now can press for lower rates before state insurance regulators finalize 2015 prices in September.
Managers at Denver Health and Kaiser did not respond to inquiries about why they are seeking premium hikes.
Sara Wright, a volunteer for a group advocating for a single-payer health system called Co-Operate Colorado, joined a group of demonstrators in front of the headquarters for Anthem Blue Cross Blue Shield in Denver on Tuesday morning. She wore a sign saying that the CEO of UnitedHealthcare makes $1 million a month and said Colorado should provide health care for everyone.
“If Vermont can do it, we can do it. If we can do pot, we can do this,” Wright said.
Ironically, the demonstrators held their rally in front of the headquarters for an insurance company that is proposing to cut its premiums next year. Anthem Blue Cross Blue Shield wants to lower rates by an average of 5 percent.
- Denver Health: Increase, 17.5 percent
- Kaiser Permanente: Increase, 7 percent
- Colorado Choice Health Plans: Increase, 6.6 percent
- CIGNA: Increase, 6.07 percent
- Rocky Mountain Health Plans, Increase, 3.1 percent
- Humana; Increase, 2.1 percent
- HMO Colorado (Anthem): Decrease, 5.1 percent
- Colorado HealthOP: Decrease, 9.6 percent
- New Health Ventures (Colorado Access): Decrease, 22 percent.
Source: Colorado Consumer Health Initiative analysis of data from the Colorado Division of Insurance.
Two other nonprofit carriers also want to cut their rates. Colorado Access, which runs New Health Ventures, proposed a 22 percent decrease, while the Colorado HealthOP plans to cut rates by 10 percent.
Adam Fox, director of strategic engagement for CCHI said he’s pleased that some carriers are actually proposing rate cuts. For years, health premiums have been rising every year, often at double-digit rates.
“It’s very encouraging to see some of the rates actually going down, but I think the fact that rates are all over the map is largely due to the fact that insurers are still figuring out this new market,” Fox said.
He expects competition and increased transparency under the Affordable Care Act to continue driving premiums down.
“Anthem and the (Colorado HealthOP) both want to go down (in cost). That’s going to mean increased competition for the consumers at the lower end of the price spectrum,” Fox said. “Kaiser may have come in very competitive last round and they got a lot of the Connect for Health enrollments because of that. Depending on the health of the population they enrolled, they may be seeing increased costs.”
While Fox is generally optimistic about proposed decreases, CCHI is working with another consumer group to ensure rates are as low as possible.
“Before any rate increase is approved, these companies ought to prove they are doing everything they can to lower costs — and not by cutting care and raising deductibles, but by cutting waste and helping Coloradans stay healthier,” said Danny Katz, foundation director for CoPIRG. “The Division of Insurance needs to put these plans under a microscope.”
Katz said insurance companies must aggressively drive a hard bargain with hospitals and reward doctors for keeping people healthy.
“Unfortunately, too often, they just keep raising rates and out-of-pocket costs to consumers,” Katz said.
Among the insurance carriers who are proposing lower rates, Anthem’s spokeswoman released a statement saying that the rates will vary by location, a person’s age and whether they smoke or use tobacco. Anthem has declined to say how many plans it sold through the exchange.
The Colorado HealthOP, a new nonprofit member-run cooperative, in contrast, has been revealing its market share all along and has adopted a policy of transparency. The HealthOP grabbed about 12 percent of exchange business and on Monday, shared its proposed 2015 rates before the Division of Insurance had posted any industry information.
Overall, HealthOP CEO Julia Hutchins said the co-op wants to cut premiums by an average of about 10 percent.
“Our prices will be lower and our benefits, in some cases, will be more (generous),” Hutchins said.
“We will be supporting prevention of illness and maintenance of health.”
Hutchins said the HealthOP has been able to drive costs down for Summit County customers by encouraging them to seek lower-cost care in the Denver area. So far, the HealthOP doesn’t have equally good options for people farther west in Vail, Glenwood Springs and the Aspen area. But Hutchins is pleased that so many people in the resort areas are focusing on the cost of care.
“It’s important that people can afford insurance. We don’t do anyone any favors if we have rates that people can’t afford,” she said. “We’re never going to be able to solve this problem of (lack of insurance) if we don’t (reduce costs). The DOI (Division of Insurance) had to act.”
People in northeastern Colorado also should see some relief from higher rates. Hutchins said the DOI’s decision to combine all of the counties in the eastern part of the state into one rating area should help the people of northeastern Colorado.
“The blending had a pretty big impact,” Hutchins said. “We saw our rates in the northeast come down pretty substantially.”
Hutchins said the HealthOP was able to propose lower rates because so far the people signing up for health coverage are not as sick as actuaries had earlier predicted. Many people who signed up for health insurance used their coverage quite a bit in January. But Hutchins said claims have settled down to lower levels in succeeding months.
“Overall the costs are significantly less than anticipated,” she said.
In its new plans, the HealthOP intends to make up-front consumer costs much more clear in 2015. Hutchins said some customers were furious when they thought they had relatively low co-pays for prescription medications. In fact, those co-pays didn’t kick in until people had paid all of their deductibles. Sometimes that meant paying hundreds of dollars out of pocket.
The HealthOP next year will be offering generic medications for low co-pays and plans to encourage wellness by offering as many as three free visits a year with a primary care provider.
Kaiser is exploring an expansion west of Denver into the resort areas. Hutchins said she welcomes the competition.
“A lot of providers have pretty strong feelings about Kaiser,” Hutchins said. “We found that even with them (Kaiser) saying they’re going into the market, there is greater interest in providers having conversations with each other and with other carriers.”
Said Hutchins: “Having a choice in a market is always helpful.”
Colorado’s insurance commissioner echoed that view in a written statement on Monday.
“Rates seem to be holding relatively steady, which means we will continue to see a strong market in 2015 that will provide Colorado consumers with many options for health insurance,” said Commissioner Marguerite Salazar.
Altogether, the number of plans is similar to those that were proposed last year. In all, Salazar’s office said it has received over 1,000 plans including 895 medical and 176 dental plans. Of the 895 medical plans, about 312 would be offered for sale through Colorado’s health exchange.