affordable healthcare ahead in Colorado

Fact Check: Does Colorado Really Have Some of the Lowest Individual Market Health Premiums in the U.S.?

January 13, 2021 / The Denver Post
Normal ECG line representing claims that are true

Recent news media reports have noted a rapid reduction in the price of individual health insurance plans in Colorado. These reductions now mean Colorado has some of the cheapest insurance premiums in the country for people who purchase their insurance through the Affordable Care Act marketplace.

CLAIM: According to the Denver Post, the monthly cost of insurance bought through the exchange in Colorado will drop an average of 1.4% in 2021.

FACT: The trend reported by the Denver Post, based on October data from Colorado Division of Insurance, is true. Insurance premiums in the individual market, where households can buy insurance directly when it isn’t provided by an employer or through a government program like Medicaid, have dramatically fallen the last two years in Colorado.

In 2019, the benchmark premium in Colorado – i.e. the second lowest silver plan for an individual 40-year-old – was $488 per month before subsidies. Next year, that same benchmark premium will be 28% lower, at $351 per month, according to data compiled by the Kaiser Family Health Foundation.

To be clear about what this data means, $351 per month is the benchmark premium for a single person who buys private insurance on the ACA marketplace before the impact of subsidies. For households making less than 400% of the federal poverty line – which is about $51,000 per year for singles, $69,000 per year for couples and about $105,000 per year for a family of four – federal tax credits can reduce the net cost of these insurance premiums considerably.

State officials have credited the introduction of a new reinsurance program for the recent reduction. In addition, as we have covered before, there is an influx of choice and competition in the individual health insurance market, especially in rural Colorado, that simply didn’t exist a few years ago.

Source: Kaiser Family Foundation

The same dataset from KFF also shows something remarkable: After tracking national trends for a number of years, Colorado is now significantly below the national average when it comes to the price of health insurance on the individual market. Based on the key benchmark premiums, Colorado is about 22% cheaper than the national average, in fact.

This also means Colorado now has the sixth lowest health insurance premiums in the individual market in the country, according to the benchmarks that are carefully monitored by KFF. For the roughly 7% of Coloradans who obtain health coverage through the individual market, this trend is welcome news.