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Tuesday, 29 November 2016 17:34

Group Insurance is Now Cheaper than Individual Insurance

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The largest increase for the individual market in Colorado, since the inception in 2014 of the Affordable Care Act Exchanges, will go into effect in 2017. Therefore, most small group insurance plans are now a better value than individual plans. As a result, some small businesses who dropped coverage to send their employees to the then cheaper individual market, are now thinking of going back to group. 
 
Here are a few sample policies for a 40 year-old non-smoker that demonstrate this new reality:

Carrier

Deductible

Coinsurance (Ind / Group)

Out of Pocket (Ind / Group)

Individual Premium

Group Premium

Savings with Group

Anthem

$1500

20%/20%

$3750/4000

$544.99

$425.55

22.0%

Anthem

$5000

25%/20%

$7150/7000

$352.23

$322.21

8.5%

Kaiser

$2750

20%/15%

$5000/5500

$315.69

$323.25

(2.4%)

Kaiser

$5250

40%/35%

$7150/6550

$258.59

$261.55

(1.1%)


The second Kaiser plan which is 1.1% more expensive actually offers a better plan and thus is a better value.  The first Kaiser plan is the exception to the general rule of what we’re seeing.
 
Colorado residents who buy coverage in the individual market (about 7.7 percent of Coloradans) can expect roughly a 20 percent increase in premiums. More alarming is that in some of Colorado’s rural areas the increase may top 40 percent, according to figures approved by the Colorado Division of Insurance
 
Group insurance premiums for small group plans will increase by about 2 percent, according to the Division of Insurance. Roughly 51% of Coloradans receive health care coverage from their employers. “The small group market seems to be stable, with more carriers participating and modest price increases,” the Colorado Health Institute stated. 
 

Why such a large increase in the individual market?

The large increase in the individual market is due to many carriers pulling out of that space or offering limited options. United Healthcare and Humana will not be offering plans on the state’s Connect for Health Colorado insurance exchange in 2017. Anthem Blue Cross and Blue Shield will limit the options for participants by not offering the PPO or preferred provider organization plans. Another player in the individual market, Rocky Mountain Health Plans will only offer plans in Mesa County. This means that about one in five consumers on the individual market will be shopping for a new Health Care Plan. 

Finally, the Division of Insurance’s has a responsibility of reviewing these premium increases filed by the insurance companies. The division can reject the proposed rates if they are too high or too low.  
 
NOTE - The information below on the number of plans and carriers and the requested premium changes for 2017 is preliminary. The information only reflects what the carriers have requested, not the final approved plans for 2017. Any requested rate has to be justified by the insurance carrier.


Medical - INDIVIDUAL Plans, Average REQUESTED Premium Change, by Company

Company

Requested Overall Change*

SERFF Tracking Number**

Anthem BCBS (HMO Colorado)

26.8%

AWLP-130560313

Bright Health Plans***

New to market

BRHP-130518475

Cigna

9.5%

CCGH-130510383

Colorado Choice

36.33%

COHP-130547449

Denver Health

0.08%

DVHH-130565984

Freedom Life Insurance

9.98%

USHG-130545454

Golden Rule

40.6%

AMMS-130560610

Kaiser Foundation Health Plan of CO

13.6%

KFHP-130552059

National Foundation Life

9.98%

USHG-130545468

Rocky Mountain HMO

34.6%

LEIF-130564677

* Averaged over all individual plans a company proposes to sell, in all areas of Colorado where the company does business, for all ages.
** The SERFF Tracking Number is way to search for the filing on the 
DOI’s system.
*** Bright Health Insurance Company is a new entrant into the health insurance market in Colorado.

 

Medical - SMALL GROUP Plans, Average REQUESTED Premium Change, by Company

Company

Requested Overall Change*

SERFF Tracking Number**

Aetna Health Inc.

-4.4%

AETN-130554115

Aetna Life Insurance Co.

-3.6%

AETN-130535284

Anthem BCBS (HMO Colo.)

4.1%

AWLP-130560332

Anthem BCBS (Rky. Mtn Hospital & Medical)

2.9%

AWLP-130560333

Colorado Choice

7.38%

COHP-130547510

Humana Health Plan Inc.

6.35%

HUMA-130570800

Humana Insurance Company

4.36%

HUMA-130570797

Kaiser Foundation Health Plan of CO

3.7%

KFHP-130552141

Kaiser Permanente Insurance

-0.9%

KHFP-130552206

Rocky Mountain Healthcare Options

11.2%

LEIF-130564669

Rocky Mountain HMO

5.1%

LEFI-130564686

UnitedHealthcare Insurance Company

-7.7%

UHLC-130570593

United Healthcare of Colorado

-1.6%

UHLC-130572383

* Averaged over all small group plans a company proposes to sell, in all areas of Colorado where the company does business, for all ages.
** The SERFF Tracking Number is way to search for the filing on the 
DOI’s system.

If your company left the group market for greener pastures, it may be time to evaluate if it makes sense to come back.  Just give us a call at (303) 369-3200 or This email address is being protected from spambots. You need JavaScript enabled to view it.

Sources:

http://www.denverpost.com/2016/09/20/colorado-health-insurance-rates-2017-individual-buyers/

https://www.colorado.gov/pacific/dora/news/division-insurance-releases-preliminary-2017-health-insurance-information

 

 
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