August 1st, 2019 – Yesterday, Colorado Governor Jared Polis announced that the federal government approved a reinsurance plan that will reduce premiums for individuals who buy their own health insurance. This creative solution was driven forward by Governor Polis and the Colorado Division of Insurance.
Governor Polis said rates will come down during the upcoming 2020 open enrollment period by an average of 18.2%. He said many people will see their rates go down 15 to 20%. On the Western slope where the rates are the highest, they may see their rates come down by 30 to 35%.
This is great news for anyone who buys their own health insurance and particularly so for those whose income is too high for federal tax credits or people who only qualify for smaller tax credits.
Governor Polis added that this reduction in costs should reduce the percentage of uninsured Coloradans, which in turn should also help reduce costs to businesses that provide health insurance for their employees next year.
“For the first time in the history of our state’s health exchange, premiums are dropping. Premiums in the individual market are projected to go down by 18.2 percent on average next year, and as much as 41 percent in some areas of the state, so long as the Federal government approves our bipartisan reinsurance program. Reducing health care costs for Colorado families has been a primary focus of my administration, and today we are seeing the first signs that our hard work is paying off,” said Colorado Governor Jared Polis. “The thousands of dollars people save can go to buying a home, saving for college or retirement, or whatever Coloradans want to do with it. I’m just thrilled to save people thousands of dollars on health care so they have more left to enjoy life. By saving families money and helping more Coloradans gain affordable, quality health care for their families, we can reduce costs across our health care system and continue our state’s strong economic growth.”
The reinsurance plan is funded by $163 million in federal money along with $87 million from Colorado. The money will be used to help pay for major claims to help reduce the burden and costs to health insurance companies. The reduced financial burden to insurers allows them to reduce the rates.
It is expected that the federal reinsurance program should continue for so long as the Affordable Care Act is law. Colorado is one of 8 states with a federally approved reinsurance program.
The Division of Insurance also announced that all the same carriers from 2019 will continue to offer plans in 2020, which is evidence of the continuing stability of Colorado’s individual health insurance market. They also said that Oscar Health will be entering the market in 2020, offering plans in the metro Denver area.