Well, health insurance costs in Colorado are going up… Again!
Colorado Health Insurance Costs Rising
Despite the promises of the Affordable Care Act (remember it was supposed to reduce health insurance premiums by $2,500 per year?) health insurance premiums have more than doubled since its passage in 2010. Colorado residents should brace themselves for an additional rate hike, averaging 5.6%, according to industry filings with the Colorado Department of Insurance.
While the overall rate of increase is slightly lower than in previous years, this minor relief doesn’t provide much help for those who have seen their premiums steadily rise over the past decade. It was only a couple of years ago that Colorado residents had to eat a 19% rate increase, the 2nd worst in the nation, behind only Georgia that year.
And this year’s increases come on the heels of a roughly 7% increase last year – also well above the rate of inflation.
Colorado health insurance costs remain a significant burden for individuals, families, and businesses alike. With few signs of meaningful cost relief in the near future, it’s more important than ever to take control of your healthcare spending.
ANALYSIS: Why Is Colorado Health Insurance So Expensive?
Colorado Option Plans Increase Less, But Network Problems Persist
The introduction of the Colorado Option was designed to make healthcare more affordable, but its success has been mixed.
The good news is that Colorado Option plans are experiencing slightly smaller rate hikes than traditional plans. However, for many, the savings are minimal, and these plans still carry other significant challenges.
One of the ongoing issues with Colorado Option plans is the limited hospital networks. Many consumers find that their preferred hospitals or doctors are not included in their plan’s network, forcing them to choose between paying higher out-of-network costs or switching providers.
This is especially problematic in rural areas of Colorado, where the number of available in-network hospitals and specialists is limited. If you’re enrolled in a Colorado Option plan, it’s essential to review your provider network carefully and weigh the costs and convenience of switching to another plan if your network is too restrictive.
Tip: If you’re locked into a limited network, consider contacting your insurance company to ask about flexibility in network exceptions. Ask for the “out-of-network specialist” or OON.
Alternatively, you can or search for plans with broader networks, even if they come with a slightly higher premium. The money you save on out-of-network care could outweigh the marginally higher monthly cost.
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COLORADO HEALTH INSURANCE
Comparison Shopping Still Pays Off
Even in the face of rising premiums, one of the best ways to control costs is to engage in thorough comparison shopping.
Most people, both individuals and small business owners, are tempted to stick with the same plan year after year to avoid the hassle of switching. However, this approach could cost you significantly over time. With annual rate hikes, even small percentage differences between plans can add up to substantial savings over the course of a year.
Contact a ColoHealth Benefits Manager for assistance in exploring all the healthcare options available to you. ColoHealth is one of only a handful of benefits brokers that is able to help get information about all your options, including plans from the Colorado Marketplace, off-exchange private plans, and even health sharing plans that allow you to choose your own doctor.
These options can help you escape Colorado’s notorious managed care networks that are the norm with ACA Marketplace plans.
Tip: When shopping for a health plan, don’t get tunnel vision, focusing on premiums alone. , focus on total annual costs, including deductibles, copayments, and maximum out-of-pocket limits. Look at the total value you receive, and your maximum exposure to unexpected medical costs each year.
You should also look carefully at the plan’s network, and make sure the best local hospitals, clinics, and providers are available to you.
HSAs and HDHPs: Smart Choices for Tax Savings and Lower Premiums
High Deductible Health Plans (HDHPs) paired with Health Savings Accounts (HSAs) can be a smart way to reduce your overall healthcare expenses.
These plans typically come with lower monthly premiums, but the trade-off is a higher deductible. While that might sound daunting, HSAs can help you manage those out-of-pocket costs. The money you contribute to an HSA is tax-deductible, and you can use it to pay for qualified medical expenses, including deductibles, copays, and prescriptions.
Unlike Flexible Spending Accounts (FSAs), which have “use-it-or-lose-it” provisions, HSA balances carry over from year to year. So you can build up savings over time, tax-deferred, and use them as needed.
For small businesses, offering HDHPs with an HSA option can reduce your overall premium costs while giving employees a valuable savings tool. It’s also a great option for employees who don’t expect to use much healthcare during the year but want a safety net for unexpected medical expenses.
In 2024, individuals can contribute up to $4,150, and families can contribute up to $8,300. Employers can also contribute to employees’ HSAs, offering a tax-deductible benefit that enhances your benefits package without drastically increasing costs.
Be sure to shop for an HDHP with reasonable coverage for preventive care, which is often covered before the deductible is met.
Actionable Tip: If you have an HSA, max out your contributions to take full advantage of the tax benefits. It’s just about the most tax-smart thing you can do with any extra income or savings you have on hand.
Health Sharing in Colorado: A Cost-Effective Alternative
For those frustrated by the continuous rise in Colorado health insurance premiums, health sharing plans offer a compelling alternative.
These community-based plans can save members up to 50% compared to the cost of traditional health insurance, especially for those who don’t qualify for subsidies on the Colorado Marketplace.
How Health Sharing Works
Health sharing plans allow members to pool their resources and share medical costs. Typically organized by faith-based or community groups, these plans operate outside of the traditional insurance system, which means they aren’t bound by the same regulations, offering more flexibility in their coverage design.
While health sharing is not insurance, and there are some limitations—such as exclusions for pre-existing conditions or restrictions on certain types of care—it can be a practical and affordable option for those in good health who are looking to reduce their monthly healthcare expenses.
Tip: If you’re considering switching to health sharing, carefully review the plan’s guidelines and any potential limitations. Ensure that the plan’s terms meet your healthcare needs.
Learn More About Health Sharing
Options for Colorado Business Owners/Employers
For small business owners, comparison shopping for group plans can lead to considerable savings. Different carriers offer different plan structures, and some plans may offer better network options for your employees than others.
These networks can vary substantially depending on your location. So you should definitely consider employee location when selecting a health plan for your workers.
Additionally, working with a broker who understands the specific needs of your business can uncover lesser-known plan options that may provide better coverage at a lower cost.
Examples include health sharing plans, qualified small employer health reimbursement arrangements (QSEHRAs), individual coverage health reimbursement arrangements (ICHRAs), and minimum value plans.
Learn More: How To Start a QSEHRA In Colorado
Health sharing plans can also be an excellent option for small businesses looking to offer affordable healthcare benefits to employees without the high costs of traditional group plans.
Don’t be afraid to ask for a review of your plan structure to ensure you’re getting the best deal for your employees. In fact, scheduling a plan design review or update with a qualified Personal Benefits Manager every year or two can be a great idea.
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Take Control of Your Healthcare Costs Now
The rising cost of health insurance isn’t something we can control, but how we respond to it is.
By actively comparison shopping, considering alternatives like HSAs/HDHPs, or switching to a health sharing plan, you can take charge of your healthcare costs and find solutions that work best for your situation.
Both individuals and small businesses need to stay informed and be proactive about their healthcare options to mitigate the financial impact of ongoing rate hikes.
If you’re feeling overwhelmed or unsure where to start, working with an expert can make a big difference. A Personal Benefits Manager can help you navigate the complexities of the healthcare market, compare options, and find the best solution for your unique needs. Don’t wait for another year of rising premiums to act.
For free personal assistance from a Colorado health insurance and plan design expert, contact a Personal Benefits Manager today and explore your options.
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Lou believes that when it comes to healthcare, the power should be in the hands of the consumer, as opposed to the hospitals and insurance companies. This means empowering the clients with the knowledge and tools they need to make the right decisions for their health, wealth, and happiness.
