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What Does the Future Hold for Colorado’s Health Insurance Rates?

What Does the Future Hold for Colorado's Health Insurance Rates?March 2nd, 2016 – With the upcoming national elections, much is at stake for 2017 health insurance rates.  Changes in the House, Senate and Presidential races will all come into play. If health insurance rates go up significantly before November 15th, that could affect the outcome of the elections themselves.

Profitable insurers like Anthem Blue Cross Blue Shield and Kaiser Permanente had more conservative actuaries and set their individual plan premiums well.  Nationally, Kaiser made a $66 million in profit on policies sold to individuals.  Anthem, who is acquiring rival Cigna this year and does business in 14 states, said it expects the exchange business to be slightly profitable this year, but lower than the 3-5% profit margin that Anthem hoped for.

On the other hand, some insurers are losing money on Affordable Care Act (ACA) plans and that means their rates may go up more substantially in 2017. Humana lost 176 million on ACA plans in 2016. Aetna said it lost up to $140 million on individual coverage last year, but expects to break even in the 14 states it’s doing business in.  Aetna is taking over Humana in another mega-merger that’s to complete later this year.

Aetna seems to be sending mixed signals about continuing to sell ACA plans in 2017, but their CEO recently said they would.  Whether Aetna plans to offer individual plans in Colorado in the future remains to be seen. Aetna pulled out of Colorado’s individual market in 2011 and were barred from re-entry to the market for a period of 5 years.  Since that time has passed it would be nice for Colorado to have another major carrier in the mix.

United Healthcare said it lost over $500 million in 2016 on its ACA plans. Last November, United Healthcare warned that it may pull out of exchanges in 2017, but it remains to be seen if Colorado would be one of the states impacted by such a change.

Colorado HealthOP and roughly half of the nations coop’s created to sell policies under the ACA failed in the last year, primarily because they set their premiums too low and experienced higher than expected claims.

In summary, Colorado’s leading individual health insurance companies, Anthem Blue Cross Blue Shield and Kaiser are doing a good job of managing their business finances, whereas some of the other carriers may see somewhat larger premium increases to account for higher than expected losses due to sicker than expected customers.  We hope to see more competition in Colorado for 2017.

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