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Why you need to shop for health insurance this year and how reinsurance changed the game

Posted at 5:27 PM, Nov 19, 2019
and last updated 2019-11-19 19:27:51-05

DENVER — Open enrollment is underway for the individual market in Colorado and this year, shopping for a new plan is more important than ever.

This open enrollment period is the first time the state’s newly passed reinsurance program will take effect. Officials from the Gov. Jared Polis administration and the bill’s co-sponsors have said for months that the program will lower insurance prices through the individual market.

However, a spokesperson with Connect For Health Colorado said it’s important to shop around for different plans because you could see your premiums go up.

What is reinsurance anyway?

When the state legislature passed the reinsurance program into law in May, the goal was to help lower premiums for about 250,000 people in the state who buy insurance through the individual market.

People who buy plans from the individual market are not getting healthcare coverage from a private insurance company through their employer or using Medicare or Medicaid.

The program helps insurers pay for some of the costliest claims, for people with serious or chronic conditions that require expensive treatment, in order to drive down premiums for everyone.

“Essentially, it’s insurance for insurers,” said Monica Caballeros, the communications and marketing manager for Connect for Health Colorado.

About two-thirds of the reinsurance program will be paid for using federal funds. Right now, that money is being used to pay for tax subsidies for patients who buy insurance through the individual market.

Some will see their premiums drop

This year, people who pay for a plan in the individual market and who don’t get a government subsidy could see their premiums drop.

“As a result of this reinsurance program rates fallen, on average across the state, 20 percent,” Caballeros said.

However, this is a relatively small group. Only about 33 percent of the people who buy into the individual market pay for it without using a subsidy.

Others will need to shop around

For the remaining 77 percent, the government offers a subsidy to help cover their healthcare costs. These are people who are considered low or middle income.

For individuals to qualify for this subsidy, they must make $50,000 or less. Families of four can make up to $100,000 annually to qualify for these advanced premium tax credits.

This year, the premiums on their current plans might go up with the reinsurance program.

“With the rates going down this year, that financial assistance amount will also decrease,” Caballeros said.

That’s why Connect for Health Colorado said it’s more important than ever to not simply renew their current plan but to look around.

“We want people to know that they actually can still see savings as long as they maybe shop around a little bit,” Caballeros said.

This might mean some families and individuals change coverage brackets or change insurance providers to find the best rates.

Some might end up paying more

Even after shopping around, the insurance premiums might go up for some people in the individual market with the reinsurance program.

However, Caballeros said she believes it’s important for people to look beyond their premiums because there could be other benefits.

“It might really help you to pay a little more in a premium,” she said.

Co-pays could end up being lower or people might be getting a lot more coverage while only paying a little more.

There is also still financial help that is available that patients can apply for in order to cover their healthcare costs.

The bottom line

The bottom line for this year’s open enrollment and the reinsurance program is you need to shop around to find the best plan for your family.

Connect for Health Colorado offers free help for people who have questions about which plan is the best for their families.

Open enrollment ends Jan. 15.