With so much debate about Obamacare in the news lately, this seemed like a good time to take a look back at the Affordable Care Act’s impact on Colorado.
When Obamacare passed, Americans were told it was the solution to provide better, cheaper, more available health insurance. Let’s see how well it has done to keep each of those promises.
Summer 2017 marks the 5th time insurers have submitted rate filings to participate in the ACA insurance exchanges. While Colorado’s state insurance filings for the 2018 plan won’t become public until July 19th, we can expect that the state market will most likely follow a national trend of skyrocketing premiums and decreasing plan choices. Insurers across the country have pulled out of the health care insurance exchanges and those remaining have signaled that large premium increases will be necessary to stay in business.
Colorado is one of 12 states that chose to utilize a state-based exchange and has not released comprehensive data to compare prices before and after the ACA’s passage. Although state-level data is not available, yearly rate increases have been in line with other states around the country.
A report issued by the Department of Health and Human Services last month showed that premiums have more than doubled on average since the implementation of the Affordable Care Act. Comparing data from 2013 (before the ACA was implemented) with prices this year shows that average monthly premiums in the 39 states using HealthCare.gov went from $232 in 2013 to $476 in 2017.
Looking at 2017 data alone gives a good, although not complete, assessment of the state of the Colorado insurance market. In 2017, Coloradans shopping on the individual market saw average price increases of 20%, with some counties seeing average premiums rise by more than 40%.
People around the country are having a difficult time paying their premiums, as a recently released HHS enrollment report shows that over 2 million consumers who enrolled in plans this year have already dropped coverage. 12.2 million individuals selected plans during this year’s Open Enrollment Period, but as of March 15, 2017, only 10.3 million had both selected an insurance plan and paid their premium.
Exit survey data collected by HHS shows that high costs and lack of affordability are the most common factors that lead consumers to cancel their coverage.
Currently, over 1,200 counties across the country will have only one insurance provider available on the individual market next year, and 35,000 people will live in counties where there will be no insurance options available on the health care exchange.
United Healthcare, Humana, Rocky Mountain Health Plans and Anthem left or scaled down participation in Colorado in 2017. That left 92,000 individuals to find another form of insurance coverage. As of now, 14 of Colorado’s 64 counties have only one insurance option. Before the ACA was enacted in 2014, each county in the state had at least 3 insurance providers.
Drop in coverage is also highly correlated with lack of financial assistance. At the end of this year’s open enrollment, 37% of people purchasing coverage on Connect for Health Colorado received no government subsidy and payed an average monthly premium of $368 per month. This amounts to over $4,000 a year in premiums.
In Colorado, the latest available data shows that 123,746 people had paid their first month’s premium and remained enrolled in coverage in February 2017. Of these enrollees, 65% received an Advanced Premium Tax Credit (APTC) and 27% qualified for Cost Sharing Reduction Subsidies (CSRs). APTCs are available to consumers whose household income is between 100 and 400 percent of the federal poverty level. A CSR helps with additional out of pocket costs and is available to consumers who are eligible for APTCs and have a household income between 100 percent and 250 percent of the federal poverty line.
While subsidizing customers with Premium Tax Credits may make coverage more affordable for an individual, it does not solve the actual problem of rising insurance costs. Premium Tax credits are tied to plan price, meaning that as premium prices increase so does the amount of tax payer dollars required. The average amount of APTC per eligible enrollee rose 28 percent between 2016 and 2017.
This additional pressure on the federal government means higher taxes and more federal debt. A report by American Action Forum shows that the average tax credit increased by nearly $1,000 this year, resulting in an estimated annual total cost to the federal government of $38.6 billion.
By the end of the 2017 plan year, taxpayers will have spent more than $118 billion on ACA premium subsidies, and approximately $25 billion on cost-sharing reduction (CSR) subsidies.
Looking Ahead: Health Care in Colorado
As information about 2018 plans is released later this summer, consumers in Colorado will have to make tough choices. Many will have to find a new insurance plan and spend more of their hard-earned incomes to gain coverage. Anthem announced recently that they plan to stay in the Colorado market place in 2018, relieving fears that many counties on the western slope would have no insurance provider.
It currently looks like all Colorado counties will have at least one insurance option, but premiums are again expected to increase by double digits. The Colorado Insurance commissioner said she expected another year of up to 25% rate increases.
Situation: Not Good
It is imperative that a solution to the rising prices and decreasing choice facing Colorado residents is found quickly. Policymakers would be wise to focus on customized, local solutions that put patients first instead of centralized, one-size-fits-all plans designed in Washington.
If Obamacare is not the answer to more affordable, available, innovative health care then what is? Check out some solutions to the health care crisis here on Thought.buzz and share your thoughts on Facebook!