Anthem’s HMO Colorado clarified Thursday that it doesn’t plan to pull large numbers of plans from the individual health insurance market, but said the state’s tardiness in approving rates forced the insurer to notify regulators it could.
On Aug. 20, the Colorado Division of Insurance announced 96,000 people might need to find new insurance plans. Anthem had notified the state it could drop 62 plans covering about 70,000 people, or roughly two-thirds of its individual market customers, and Rocky Mountain HMO said it could end 20 plans covering about 26,000 people, the division said.
About 296,000 people in Colorado enrolled in marketplace plans this year. Analysts expect enrollment to be lower next year, when higher subsidies put in place during the pandemic end.
On its website, Anthem said it gave notice about possibly withdrawing plans because the state hadn’t approved rates in August, as it usually does. That created uncertainty about whether some plans would be financially unviable, the company said.
Colorado Insurance Commissioner Michael Conway countered that the rates aren’t typically ready by that point, so a delay doesn’t explain Anthem’s decision. The division notified insurers it wouldn’t finalize rates until late September because lawmakers were going to try to stabilize the individual market during the special session that concluded this week, he said.
“That angle from Anthem just isn’t accurate,” he said.
Lawmakers passed a bill with two provisions that will blunt premium increases, meaning the rates insurers submitted earlier this year no longer need to rise as much, Conway said.
Colorado requires health insurers to submit proposed rates for their plans in June each year, then spends the next few months determining if the requested rates are necessary to keep the plans financially stable, without generating excessive profits.
Insurance companies have to file a notice by Aug. 19 if they could drop a plan, though the notice doesn’t obligate them to follow through. Anthem said it didn’t intend to actually end any plans, assuming the division approves “financially sustainable” rates. In any case, the insurer said it wouldn’t leave counties that lacked other options on the individual marketplace.
“It is important we propose financially sustainable rates in order for Anthem to cover the cost of care for our members in 2026,” the company said.
Rocky Mountain HMO didn’t respond to questions about whether it intends to drop the plans included in its notice.
The division previously estimated premiums would rise by an average of 28% next year.
Lawmakers voted earlier this week to kick in $50 million — drawing down about $100 million in federal matching funds — to backstop insurers, Conway said. The money will limit how much insurers could have to pay and, consequently, how much they can charge customers. The division estimated that the fund will lower the average increase to about 19%, he said.
The additional $50 million from the legislature will allow the state to partially replace the expiring subsidies for customers earning less than four times the poverty line, with an emphasis on people with lower incomes, Conway said. The division is still sorting out how that will affect overall premiums, but thinks it will encourage more than 20,000 people to stay in the individual market.
Generally, healthier people are the first to drop insurance coverage when it gets more expensive, which forces premiums to rise further as fewer people share the costs of covering those who are sicker. Keeping some of those people in the market will help blunt the increases in premiums to some extent, he said.
“We’re modeling out exactly what we think we can achieve,” he said.
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