Health insurance

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Less than a month remains before the first — and arguably, most important — deadline to purchase health insurance for 2020.

And health care experts say that means one thing: Time to shop around.

Open enrollment — that annual rite when people without employer or government-based health coverage can purchase a plan for the upcoming year — is in full swing. And the clock is ticking to find a deal.

“It pays to shop around a little bit, to compare your options and see, rather than just blindly auto-renewing and taking what you had last year,” said Vincent Plymell, spokesman for the Colorado Division of Insurance.

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Shoppers have until Dec. 15 to pick a health insurance plan for next year, if they want that coverage to begin on New Year’s Day.

As is the case every year, the health insurance landscape in Colorado shifted over the past year. And that can have wide-ranging consequences for people who have to purchase their own coverage.

On average, monthly insurance rates will be significantly lower across Colorado in 2020 — a first for the state since the Affordable Care Act took effect. But that comes with an asterisk for many people who have enjoyed federal help paying their monthly premiums.

Also new this year is a simplified website for the state’s exchange, Connect for Health Colorado, which features 130 plans from eight insurance carriers.

So how can shoppers best navigate this year’s enrollment period? Here’s a run-down of what to expect:

What’s new this year?

First off: Lower prices.

For the first time in years, average health insurance rates dropped 20.2%. It’s a marked change from the wild price spikes of years past, when rates rose more than 20% to 30%.

And consumers’ options will expand slightly.

Every insurance company that operated in Colorado in 2019 will be returning in 2020, and they will be joined by a new insurance carrier, Oscar Health.

How did those prices drop so much?

It’s all thanks to something called reinsurance — a kind of insurance for health insurance companies that has been increasingly popular in states across the nation. Lawmakers in Colorado passed legislation this past spring to create such a program here in Colorado, and it’s garnered quick results.

Like everything with health care, the reinsurance process is complicated. But in general, the program created a pool of money that will help pay for some of the most costly health care bills in the state. As a result, insurance companies were able to lower prices across the board.

Does that mean my coverage will be cheaper next year?

Not exactly. The state’s reinsurance program was mainly meant to help people who have long borne the brunt of price increases in recent years — especially residents living in Colorado’s mountain towns or across the Western Slope.

For years, individuals and families earning four times the federal poverty level — about $50,000 for an individual or about $103,000 for a family of four — have had the most difficult time paying for their health insurance, because that’s when the federal government stops paying subsidies to cut down the monthly cost of coverage.

And for years, people living in ski towns and west of the Continental Divide have faced some of the highest health insurance rates in the nation.

For them, coverage is expected to be significantly cheaper.

But anyone who already had coverage through Colorado’s exchange, Connect for Health Colorado, and who received tax credits for their plans may want to shop around. Due to the way those tax credits are calculated each year, shoppers who keep their current plans may actually see their monthly costs increase.

Why could some people pay more in 2020 when average prices are dropping?

Have we mentioned that health care is complicated? Same goes for the process to calculate federal tax subsidies.

Essentially, the tax credits get more generous when the cost of insurance increases — and they become less generous when the cost of coverage decreases.

That’s what will happen in 2020 — the average cost of a key insurance plan fell. So tax credit amounts also will fall next year.

So what are experts recommending?

In two words: Shop around.

Deals can be had on the state’s exchange for people who are willing to do a little research, said Kevin Patterson, CEO of Connect for Health Colorado.

For example, shoppers can save 8% to 19% by switching to the lowest-cost plan in their current coverage tier, according to the exchange.

And 55% of customers receiving financial assistance can still get a plan for $50 per month or less, the exchange said.

“It’s going to be really important for people to look at their options,” Patterson said. “Look at their own family budget, just get it on the kitchen table and figure out what makes sense to them.”

The subsidies aren’t available to everyone. Only people earning 138% to 400% of the federal poverty level can get federal tax credits to cut down on their monthly premiums, which are the monthly price of health insurance.

Additional benefits are available to cut down the out-of-pocket costs for people earning 2½ times the federal poverty level — meaning about $31,200 for an individual or $64,300 for a family of four. That includes help on such things as a policyholder’s copay and co-insurance.

Any fine print?

We’re talking about health insurance, so yes. Lots of it.

Experts stress that shoppers should never only consider an insurance plan’s monthly price tag. That’s because premiums are only one factor in how much patients pay every year for health care.

Plans with low monthly payments — often sold on the bronze or silver tiers — can have deductibles in the thousands of dollars. That means insurance companies won’t pay a dime until patients pony up a predetermined amount of cash.

There’s also co-pays — generally, the amount of money charged at each doctor’s appointment, or for picking up a prescription. And there’s co-insurance — the percentage of a patient’s bill that is the patient’s responsibility. In general, under plans with cheaper monthly prices, patients pay a higher percentage of each medical bill.

“If you expect that you’re going to need insurance, or you might need more doctor’s care than usual, a bronze plan might end up costing you more in the long run,” said Joe Hanel, spokesman for the Colorado Health Institute.

Also, different plans cover different sets of doctors. So, anyone who likes their doctor may want to think twice about switching their plan. Or, they may want to thoroughly research whether another plan covers their current physicians, Hanel said.

“It might come down to a trade-off between your premium price and being able to stay with the provider you like,” Hanel said.

Are there other coverage options, outside of the individual market?

Yes, but Colorado’s insurance regulators urge extreme caution when it comes to seeking alternative forms of coverage.

Health care sharing ministries, for example, have become popular alternatives for some people seeking to avoid purchasing coverage from insurance companies. Such companies work by collecting a set amount of money from a group of people, and then using that money to pay for certain health claims.

Such businesses are not considered health insurance, said Plymell, the state insurance division spokesman. And the state agency does not regulate those plans.

The companies may not cover pre-existing conditions, Plymell said. They also might not cover some conditions or health care procedures, due to moral objections, he said.

“There’s no guarantee that they’re going to pay the claims,” Plymell said. “Typically they’re not aligned with provider networks.”

“It’s not insurance — it’s something different and it’s another one of those ‘buyer beware’ situations,” Hanel added.

All of this seems … complicated. Are there ways to get help?

Yes. Connect for Health Colorado has a call center, as well as a network of walk-in sites that people can visit for assistance. Also, health insurance brokers can help people decide which plan is best for them, Patterson said.

When is the deadline for purchasing coverage?

Shoppers have until Dec. 15 to purchase a plan for 2020, if they want that coverage to begin Jan. 1. But, because Colorado operates its own exchange, the state has a later deadline than most other states for buying 2020 coverage.

In Colorado, people can purchase plans for 2020 by Jan. 15. However, that coverage won’t take effect until Feb. 1.

What if I don’t get coverage?

Congress in late 2017 effectively scrapped the individual mandate as part of that year’s tax reform bill. So, going without coverage no longer means incurring a tax penalty.

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