By Julia Hutchins
Two years ago, we started Colorado HealthOP with the idea that the health care insurance industry needed a disruptive force, particularly in driving prices down. And we weren’t alone – more than 20 “Consumer Operated and Oriented Plans,” known as CO-OPs, have been started across the country to introduce more competition and choice into an industry that for years has been all but closed to new entrants.
Colorado HealthOP and the CO-OP model approach health insurance in a very different way – a member-driven experience. We expected this model would cause concern for much of the health care insurance establishment that has a vested interest in the status quo, and we haven’t been disappointed.
With the 2015 health insurance open enrollment window well under way, there has been a lot of attention paid to the health insurance marketplace, including Connect for Health Colorado and Colorado HealthOP. A lot of the attention we have received is because our disruptive model has lowered premium rates for hundreds of thousands of Colorado consumers, potentially saving them millions of dollars in annual premiums.
Lower rates available to Coloradans in 2015 – such as those offered by Colorado HealthOP – have also caused some ripple effects, including lowering federal subsidies. Federal subsidies available to low- and middle-income consumers are based on benchmark rates, which is the second-lowest-cost silver plan available in a market.
If a subsidy is reduced, though, it is only because overall premiums have also fallen. It also means that fewer tax dollars are needed to support millions of Coloradans getting health insurance, and that is good for everyone.
We do understand that many people will want to switch health insurance carriers to keep their rates low – possibly lower than last year. This is a result of subjecting health insurance to the open marketplace, which is intended to drive prices down through competition. Shouldn’t a health insurer that is reducing premiums be good for consumers? Isn’t that what consumers have wanted all along?
The health care insurance market in Colorado and nationwide is in a period of transition, and many insurance providers are perfecting their methodology for assigning pricing to their plans. Colorado HealthOP is no exception, and this year we – like many other insurance carriers in Colorado – were able to lower our premiums based on the latest information available to us.
Unlike many others in this industry, Colorado HealthOP is not in business to make a profit. As a nonprofit CO-OP, any profits we do make go back to our members in the form of better benefits, lower premiums and improved services. And our members and our member-run board of directors tell us how to reinvest those profits. Members also inform many other parts of the CO-OP operation, including the kinds of benefits and doctors they want included in their plans.
We priced our 2015 plans based on available information from our members and the marketplace, as well as on statistical analyses from financial, health care and data experts. Like all health insurers, we relied on experts to help estimate the projected cost of care for a new, unknown population – individuals who previously have not been able to access affordable health insurance. Insurance plan pricing and benefits from all providers, including Colorado HealthOP, must go through a rigorous review process with the Colorado Division of Insurance before being offered to the public.
Few industries have gone through as much change in the past decade as health care. The best way Coloradans can ensure they get the most value for their needs is to shop all the available options. At Colorado HealthOP, we are proud of the plans we offer our members, that we put people before profits, and are committed to getting people the care they need.
As the popular adage goes, “Change is the only constant in life.” And in the new health insurance landscape, this is truer than ever. The next few years are likely to be just as volatile as more Coloradans obtain health insurance coverage and the industry adjusts as insurers get a more precise handle on the costs of covering the previously uninsured population. The good news, however, is the health care insurance market is more competitive than ever. We are proud to give Coloradans a smart new choice – a member-influenced health plan that exists to make health care cost less and work better for people.
Julia Hutchins is the CEO of Colorado HealthOP, a nonprofit health insurance CO-OP company. Colorado HealthOP is a member-influenced, member-governed organization committed to making health insurance more affordable for and accessible to Colorado.
Opinions expressed in Health News Colorado represent the views of the individual authors.