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Colorado's 2018 Individual Health Rates Will Be Weird: Wakely

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Colorado residents who use individual major medical coverage in 2018 could face huge variations in price increase levels, depending on how much they earn, where they live, and whether they actively shop for coverage.

Actuaries from Wakely Consulting Group L.L.C. have shown how strange 2018 individual major medical pricing could be, and how difficult forecasting actual 2018 consumer spending is, in a new report prepared for the Colorado Division of Insurance.

(Related: New Flexibility Could Ease 2018 Pain: Exec)

Managers of Connect for Health Colorado, the state’s state-based Affordable Care Act health insurance exchange, posted the report in a recent board meeting packet. Chris Adams, a broker in Colorado noticed the report, and sent it to ThinkAdvisor Life Health.

The exchange plan open enrollment period for 2018 is set to start Nov. 1.

This year, the Colorado exchange has about 150,000 users. The exchange gets many of its new users through commercial agents and brokers.

Exchange plan users in Colorado can qualify for advance premium tax credit (APTC) subsidy money if they earn less than 400% of the federal poverty level.

Federal rules require the issuer of each plan to assign it to a specific “metal level,” or benefits richness level. A silver plan, for example, pays about 70% of the actuarial value of a standard “essential health benefits” package. A bronze plan pays 60% of the actuarial value of the EHB package, and a gold plan 80% of the actuarial value of the EHB package.

Colorado has nine different individual major medical coverage pricing regions. Each region will have at least one issuer, but the number of individual coverage issuers and plans is on track to fall. Exchange managers believe 22% of current exchange users are in plans that will go away in 2018.

High-Income Users

The Wakely analysts found, when they crunched actual 2018 premium numbers, that the average 2018 rate increase for Colorado exchange users who earn more than 400% of the federal poverty, will not qualify for APTC help, and will simply keep their current coverage will be 32%. The average monthly rate for those enrollees would increase to $479, from $362.

The average increase for the high-income snoozers will range from 28% in the Greeley, Colorado, area to 42% in eastern Colorado.

High-income exchange users who actively switch to the cheapest plan available within their current coverage metal level can hold their average 2018 rate increase to 18%, and their monthly payment to $428.

Low-Income Users

The numbers for low-income consumers who qualify for APTC subsidies is stranger, because the APTC subsidy is designed to eliminate most or all of the effects of premium increases that push the full cost of coverage over the official Affordable Care Act affordability limit for a given consumer.

Wakely analysts found that the full cost of coverage for APTC users who simply keep their current coverage will increase an average of 56% in 2018, with regional increases ranging from an average of 38% in Grand Junction, Colorado, to 72% in Boulder, Colorado.

The average full monthly premium would increase to $494, from $316.

But, because the APTC subsidy would also increase, the actual net out-of-pocket cost of the coverage for the low-income snoozers would fall an average of 18%, to $123 per month.

For low-income snoozers, the average net premium change would range from a drop of 27%, in Greeley, to an increase of 12%, in western Colorado.

Low-income exchange users who shop actively for coverage can get an even better deal.

If they shift to the cheapest available plans within their current metal level, they can cut their average monthly net premium 49%, to $76, according to the Wakely analysts.

Read Judge Thinks Health Insurers Could Still Get 2017 CSR Money on ThinkAdvisor.

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