CO insurance rates are rising

This chart shows ValuePenguin’s calculated rate of change — 2022 versus 2023 — for the average cost of health insurance in the Four Corners states. Graphic by James Steindler

At the end of the year, The Sopris Sun was contacted by an insurance spokesman for ValuePenguin – a subsidiary of LendingTree – who informed the local newspaper that in 2023, health insurance premiums in Colorado would increase more than most states.

In fact, ValuePenguin’s report suggested that interest rates in Colorado would rise an average of 19.56%, just behind Georgia’s 20.3% rise. Most of the data collected for ValuePenguin’s reports comes from the Center of Medicare and Medicaid Services. According to its website, “The average cost per state was calculated from silver plans for 40-year-olds.”

The Sopris Sun turned to the Valley Health Alliance (VHA) for local insight. VHA communications person Allyn Harvey was quick to point out, “Apparently we did [some of] the highest premium increases in the nation, but as a state overall, Colorado remains below the national average.”

In fact, a chart provided with ValuePenguin’s initial email showed Colorado ranked as the 36th “most expensive” state for premium costs. Premium costs in Wyoming are estimated to be the highest.

While there were likely several factors driving the overall rate increase in Colorado, according to VHA executive director Chris McDowell, he suspected there are two significant factors. The first is inflation and the second is an “unintentional consequence” of Colorado’s public option.

The intent behind Colorado’s public option is to require insurance companies — UnitedHealthcare, Rocky Mountain Health Plans, and Anthem, locally — to offer plans with lower premiums yet more choices. “There was some cost shifting involved, so I think that affected that as well,” McDowell said.

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As of 2014, VHA served six large local employers with self-funded insurance plans. These employers assume the risk of the healthcare costs of their employees – and their families – like an insurance company and promote a value-based model of healthcare. Valley Health Alliance member organizations include Aspen Skiing Co., City of Aspen, Pitkin County, Aspen Valley Hospital, Valley View Hospital and Grand River Health Centers. Mountain Family Health Centers, all five local chambers of commerce and regional primary care practices are also on the VHA board.

Value-based healthcare reduces the fee-for-service model and focuses on a patient building a relationship with their primary care provider. Because often people’s doctor’s visits are reactionary and they go straight to a specialist or to the emergency room, and it ends up costing significantly more than a visit to their doctor, according to McDowell. In the long term, costs for insurers and insured persons should be reduced through value-oriented care.

“This has been shown to improve outcomes and reduce costs for patients and payers,” said Harvey. “The benefits of this work extend beyond the VHA affiliates to the larger community.” This is because lower medical costs should result in lower insurance rates overall.

Additionally, “being uninsured or underinsured, which a lot of us are, really increases the overall cost of care for everyone,” McDowell added. “There were two things that ACA [Affordable Care Act] tried to fulfill. One was building a risk pool large enough to reduce overall costs… and the process and outcome of value-based care.”

In recent years, VHA has seen a need to address rising health insurance costs for individuals between Aspen and Parachute who purchase their own health insurance (8-10% of residents) and for small businesses. They partnered with Rocky Mountain Health Plans — a Grand Junction-based insurer owned by UnitedHealthcare — which then began offering 2021 individual plans on the Connect for Health Colorado exchange. In addition, United began offering coverage for businesses and nonprofit organizations with up to 99 employees.

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“On the retail exchange, Rocky has achieved very competitive and even lower premiums than Anthem for the 2021 insurance year. In 2022, Rocky cut its premiums almost across the board and captured a significant share of the aspen-to-parachute market,” Harvey continued. “Premiums have increased this year but remain well below the national average.”