September 06, 2017 04:39 PM UTC

Health Insurance: What's Jacking Those Rates Again?

• 6 Comments
• by: Colorado Pols

Denver7’s Blair Miller reports on approved health insurance premium increases announced today for the individual market in Colorado–plans that are more expensive for 2018 than they were this year, though not quite as bad as originally feared:

Health insurance premiums for individual medical plans in Colorado will go up by an average of 26.7 percent in 2018, and small group plan premiums will rise by an average of 6.6 percent—both slightly lower than was originally estimated earlier this summer.

The Colorado Division of Insurance released the finalized premium hikes for next year’s health insurance plans on Wednesday, nearly two months after it released the requests made by the various companies operating in Colorado…

Individual plans make up between 7 and 8 percent (around 450,000 people) of the state’s population with health insurance coverage, and more than half of Coloradans are insured by their employer.

The 26.7 percent average hike is an increase from the average 20 percent increase in individual plan premiums in 2017. In 2016, individual policy premiums went up by 9.8 percent.

The premiums don’t account for the federal tax credits offered on the state health exchange that help offset costs for people based on their income, age and location in Colorado.

As we’ve discussed many times in the past, the most sensationalized top-line increases in insurance premiums don’t reflect what most Coloradans and businesses located in the state actually pay. Increases for employer provided group insurance have been much smaller on average than for individual and small-group plans, and accounts for far more insured people. And on the individual market, premium increases are continuously offset by tax credit subsidies for premium support.

Every year since the passage of the Affordable Care Act in 2010, news of premium hikes for insurance plans has turned into a political hot potato–with Republican opponents of the law blaming reform for premium increases and freely fudging the details to make the problem seem worse than it actually was. That’s not to say premium hikes are okay–it just needs to be remembered that premiums were spiking before the ACA was passed. But this year, as a release today from the Colorado Consumer Health Initiative explains, premium hikes can no longer be laid at the foot of a now-former President:

The Congressional Republicans’ failed efforts to repeal the ACA combined with the Administration’s wavering on issues like whether to pay out cost-sharing reduction payments has created uncertainty in the insurance market. [Pols emphasis] This uncertainty, combined with claims experience, high prescription drug prices, and less competition in some areas of the state, drove up the insurance companies’ rate filings. Today, the DOI granted most of the insurers’ requested rate increases, meaning consumers who cannot access financial assistance will pay higher prices for their health care.

“The irresponsibility of this Administration and Republicans in attacking the stability of our health coverage systems is simply astounding,” said Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative. “While one party looked for ways to roll back access and affordability rather than making constructive efforts to fix the private insurance market, rates have gone up and consumers will bear the cost.”

…Fox continued, “Republicans in D.C. have already cost consumers in these substantial increases to next year’s premiums, and the Trump Administration continues to sabotage the individual market by slashing funding for marketing and outreach. This change alone will lead to lower enrollments, a sicker insurance pool, and higher premiums next year. Our elected officials need to look at common-sense, bipartisan ideas like those presented by Colorado’s Governor to stabilize the individual market.”

Whether or not this translates into support for the plan from Govs. John Hickenlooper of Colorado and John Kasich of Ohio to stabilize the insurance marketplace is tough to say right now, but politically it really should. Every day that Republicans preside in the majority while these problems persist and worsen leaves them responsible in the eyes of voters for the harm being done. Arguably that’s been true for all the years Republicans refused to do anything to address issues that cropped up under President Obama–but now it’s undeniable. There’s nowhere left to pass the buck.