Not many understand the health insurance industry. When insurance companies file their rates with the Colorado Division of Insurance each year, the data and information is not easily digestible for the average consumer. Only those with knowledge of the industry have the ability to discern this information and comprehend whether or not the premiums are accurate and fair.
That’s one of the reasons why Peak Health Alliance got its start in Summit County in 2018. The organization is a nonprofit health insurance purchasing alliance that hires an actuarial firm each year to help them wade through these proposed filings from insurance companies. With the help of this firm, and using their own team’s knowledge of the industry, the small staff of five is usually able to lower rates for the eight counties it currently serves.
Right now, Peak Health is trying to do just that as it examines the rate filings that Bright Health, its chosen insurance carrier for the past few years, has filed with the division of insurance.
Those preliminary rates, filed on July 12, have caught the attention of some community leaders. Some are sounding the alarm on what it could mean for community members’ pocketbooks.
“I think they are tragic for the people of Summit County,” said Tamara Pogue, Summit County commissioner and former CEO of Peak Health. “Summit County residents are under such incredible financial pressure from inflation, from the increased costs of housing. To add one more thing is devastating to me.”
According to rate filing documents Bright Health submitted to the division of insurance, the company is asking for a 7.8% base rate change, meaning all individual plans will increase by that percentage. But on top of that, the company is submitting a 34% increase for its rating area factor for Summit County and surrounding communities, according to the filing documents.
Colorado Insurance Commissioner Michael Conway explained that this “rating area factor” is a number calculated by Bright Health that takes into account how expensive it is to insure a particular population. To start, the base rate is an increase for everyone, but then insurance companies can further increase the cost of premiums depending on whether or not individuals smoke, what their age is, where they live and family size.
In addition to the rating area factor, companies will also tack on a “benefit factor” which a company uses to quantify how rich they believe their plans to be, said Vincent Plymell, spokesperson for the division of insurance. Plymell said Bright Health is proposing a 2.9% increase for Peak plans.
This means that for counties including Summit, Dolores, Grand, Lake, La Plata, Montezuma and San Juan, the proposed increase to individual premiums is nearly 49% higher than today’s premiums, according to Plymell’s calculations using data from Bright Health’s filings.
Peak Health CEO Anne Ladd said her organization is well aware of this proposed change and that with the help of their third-party firm, as well as the division of insurance, they are investigating why Bright Health has submitted such a steep incline. She said that she felt that Peak Health had worked to “be good neighbors” and said that the rating area factor should not be so high.
“The question is, what is the right number, and I can’t answer that until we have more information,” Ladd said. “What do we think is the right number? What’s a fair number? Again, we’re not trying to put Bright out of business. That’s the last thing we want. We want our partner in business. We want the providers in the community in business. We also want local citizens to have access to affordable health care.”
According to the rate filing documents Bright Health submitted, the average rate increase for 2023 across all of the areas it insures is 21%. Last year, on average, the plans didn’t increase but dropped 0.6%. The last time Bright Health proposed an increase for its plans was in 2018 for 2019, when the rate increase was, on average, 7%. When it filed its rate increases in 2017 for 2018, it was a 31% jump, on average.
Conway said the division of insurance is investigating and analyzing the information Bright Health filed this year, just like it’s doing with all the insurance companies. By law, insurance companies must file their rates with the division of insurance before they can market their products to the general public.
Conway said the division of insurance has 60 days to evaluate the information and ensure that the companies are not overinflating their prices. The division works with the companies to come to an agreement and eventually, the division approves the rates before open enrollment begins in November.
Conway noted that the division usually comes to an agreement with the companies. The last time the division disapproved a rate was in 2010.
Right now, the division is currently collecting public feedback about these rate filings until Aug. 1. During that time, Conway said anyone is able to submit comments. This could be individuals who want to provide input on how these proposed changes could impact them as well as providers who have information on what it’s like working with a particular company. Though this doesn’t mean the division of insurance will disapprove a rate, Conway said these stories are helpful as the entity continues to engage with insurance companies.
Ladd said Peak is also in the process of analyzing Bright’s information and why they proposed the rate filings they did. Peak Health has until Aug. 1 to submit comments, and Ladd said this is the organization’s highest priority.
She also encouraged community members to submit their own comments too.
“Engage in the public comment process, and understand that this is the request and (that) where we end up is likely to be lower,” Ladd said. “The question is how much lower.”
To file a comment, visit the division of insurance’s website at DOI.Colorado.gov.
Final plans and premiums for 2023 will be released in mid-October, and open enrollment begins Nov. 1.