How many people are enrolled in Colorado Option health insurance?

Colorado Gov. Jared Polis announced Tuesday during his State of the State address that nearly 35,000 people have signed up for the Colorado Option health insurance plan in the first year of the program.

The figure includes nearly 25,000 people who signed up for the Colorado Options plan through the Connect for Health Mall in Colorado. Another 10,000 people signed up through OmniSalud, a new program that offers state-subsidized insurance plans to people who lack immigration documentation and, therefore, are ineligible for federal benefits available on the main Connect for Health portal.

The figure provides some of the first data to show whether the program, nearly two years in the making and a major health policy initiative for Polis and legislative Democrats, is succeeding. But, as expected, interpretations of the number were widely divided on Tuesday.

Polis called the number “exceeding our original enrollment goals,” and Colorado Insurance Commissioner Michael Conway said in a statement that enrollment “far exceeded my hopes for what we would achieve in our first year.”

The Colorado Option is a state-designed insurance plan sold by private insurance companies, which reap both the reward if it’s profitable and the risk if it’s not. It’s basically Colorado’s market-based solution for creating a public health insurance option. Colorado Option plans are currently only available in the small group and individual markets. These are places where small businesses buy plans for their workers, respectively, and where people who don’t have coverage through their employer shop for coverage themselves.

The Colorado option aims to offer better coverage than usual and is commanded to sell at below-average prices, though critics question whether it succeeds on either front.

Above expectations

As of January 10, more than 192,000 people have signed up for a health plan via Connect for Health, according to the exchange. Open enrollment ended Jan. 15, and the final open enrollment numbers haven’t come out yet — which means the Colorado option enrollment number and total number may continue to increase. But right now, Colorado Option sign-ups account for about 13% of all major exchange sign-ups.

While the state has never released a projected enrollment number for the Colorado option, Vince Plemmel, a spokesperson for the state’s insurance department, said the agency was internally hoping to get about 5% to 7% of total signups, which means the actual number is roughly twice as high. They say they expected it.

“I probably shouldn’t be surprised,” Conway said in his statement. “Not only do these plans create more competition in our insurance market, but they deliver a better value for Coloradans, with many services that lead to better health outcomes offered at no or reduced costs.”

For advocacy groups supporting Colorado Option, the numbers show the value the plans bring to the market.

“It should come as no surprise that Colorado beat national trends by enrolling in CO Option insurance because we gave people what they said they wanted,” said Jake Williams, CEO of Healthier Colorado, in a statement.

Critics respond

But for opponents of the Colorado Option, the subscription numbers show that the plans weren’t just attractive to many people — despite the state’s efforts to favor the Colorado Option on the market.

Web site for Connect for Health Colorado, the state’s health insurance exchange, seen in October 2018 (Eric Lubbers, The Colorado Sun)

The state initially displayed Colorado’s Option plans first in search results on Connect for Health. For people whose current health insurance company was leaving the market, the state automatically assigned them to the proposed Colorado Option plan, with more work required if they wanted to choose something else. The only plans available through OmniSalud were the Colorado option plans.

And although the state said customers collectively could save $14.7 million by choosing the lowest-cost Colorado Option plan available to them instead of auto-renewing their existing plan, Colorado Options plans often weren’t the lowest-cost available to consumers.

“Most Colorado residents agreed that a non-standard private insurance plan was the best fit for them,” Brandon Arnold, associate director of the Colorado Association of Health Plans, said in a statement.

“More than 87% of Colorado residents find better value through Colorado health insurance providers, but efforts that could save people health care money, such as reducing the regulatory burden, have been missing.”

This point is echoed by many insurance brokers — people who help consumers shop for insurance plans. Colorado options plans were often not the best for the consumers she worked with and other brokers, said Megan Fearing, president of the Colorado State Association of Health Insurance Agents, a brokerage group. Which made her wonder if the program was worth the effort.

“I would say the numbers are a little bit higher than we expected,” Fear said. “But I can also say that it’s disappointing that we’ve been through all this for such a fraction of our state’s population.”

Bigger battles to come

Although no legislation is expected to significantly modify Colorado’s option in this session — at least none that has a realistic chance of succeeding — the health insurance wars are likely to remain hot in 2023.

This is the first year that the Insurance Division has the power to withdraw carriers to a public hearing if Colorado option prices are not low enough. (Insurers are required to sell the Colorado option at progressively lower rates for the first three years of the program — dropping to 15% below 2021 rates in 2025, after accounting for inflation.)

Those hearings, in turn, could lead to unprecedented regulatory action by the state government — including the ability to tell hospitals how much they can charge for the service, in order to lower Colorado option prices.

For health reform advocates, the hearings are where the benefit of the Colorado Option program really begins. And the regulatory authority displayed at those sessions will make the Colorado option more attractive to consumers next year.

“Some in our health care system are trying to avoid accountability,” Adam Fox, deputy director of the Colorado Consumer Health Initiative, which supports Colorado’s choice, said in a statement. “With this increased transparency, we will ensure that the industry meets the requirements that Coloradans deserve, which will make Colorado’s option plans even more effective in the coming year.”

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