Roughly 35,000 people signed up for a Colorado Option health insurance plan in the program’s first year, Gov. Jared Polis announced Tuesday during his State of the State speech.
The figure includes approximately 25,000 people who signed up for a Colorado Option plan through the state’s Connect for Health Colorado shopping exchange. Another 10,000 people signed up through OmniSalud, a new program offering state-subsidized insurance plans to people who lack immigration documentation and are, thus, not eligible for federal subsidies available on the main Connect for Health portal.
The number 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 might be expected, interpretations of the number were widely split Tuesday.
Polis touted the figure as “surpassing the original enrollment goals,” and Colorado Insurance Commissioner Michael Conway said in a statement that enrollment “far surpassed 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 both reap the reward if it is profitable and bear the risk if it isn’t. It’s basically Colorado’s market-based solution to creating a public health insurance option. Colorado Option plans are currently available only in the small-group and individual markets. Those are the places where, respectively, small companies buy plans for their workers and where people who don’t have coverage through an employer shop for coverage on their own.
The Colorado Option is intended to provide better coverage than normal, and is required to be sold at lower-than-average prices, though critics question whether it has succeeded on either front.
Exceeding expectations
Through Jan. 10, more than 192,000 people had signed up for a health plan via Connect for Health, according to the exchange. Open enrollment ended Jan. 15, and final open enrollment numbers are not yet in — meaning the enrollment figure for the Colorado Option and the overall number could still increase. But right now, Colorado Option enrollments account for about 13% of total sign-ups on the main exchange.
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While the state never published a projected number for Colorado Option enrollment, Vince Plymell, a spokesman for the state Division of Insurance, said the agency internally was hoping for about 5% to 7% of total sign-ups, meaning the actual number is roughly double what they say they expected.
“Perhaps I shouldn’t be surprised,” Conway said in his statement. “Not only do these plans create more competition in our insurance market, they offer a better value to Coloradans, with many services that lead to better health outcomes offered at no-cost or low costs.”
To advocacy groups that support the Colorado Option, the numbers demonstrate the value the plans bring to the market.
“It shouldn’t be surprising that Colorado beat national trends with our CO Option insurance enrollment because we gave people what they said they wanted,” Jake Williams, the CEO of Healthier Colorado, said in a statement.
Critics push back
But to opponents of the Colorado Option, the sign-up numbers show that the plans just weren’t appealing to that many people — despite the state’s efforts to favor the Colorado Option in the marketplace.
The state initially proposed that Colorado Option plans be displayed first in search results on Connect for Health, a decision that was later reversed before open enrollment began. People whose existing health insurance carrier was leaving the market were automatically shown a suggested Colorado Option plan to sign up for, with more work required if they wanted to choose something else. The only plans available through OmniSalud were Colorado Option plans.
And, while the state said customers collectively could save $14.7 million by choosing the lowest-cost Colorado Option plan available to them rather than auto-renewing their existing plan, Colorado Option plans often were not the least-expensive available to consumers.
“Most Coloradans have agreed that a non-standard, private insurance plan is better suited for them,” Brandon Arnold, the associate director of the Colorado Association of Health Plans, said in a statement.
“More than 87% of Coloradans find better value through Colorado’s health insurance providers, but efforts that could save people money on health care, like decreasing the regulatory burden, have been lacking.”
That point is echoed by many insurance brokers — people who help consumers shop for insurance plans. Meagan Fearing, the president of the Colorado State Association of Health Underwriters, a brokers group, said Colorado Option plans often were not the best fit for consumers she and other brokers worked with. That made her question whether the program is worth the effort put into it.
“I would say the numbers are a little bit higher than we expected,” Fearing said. “But I would also say it’s disappointing that we’ve gone through all of this for a fraction of our state’s population.”
Bigger fights to come
While there’s not expected to be any legislation to modify the Colorado Option significantly this session — at least none with a realistic chance of passing — the health insurance wars will likely remain hot in 2023.
This is the first year the Division of Insurance has the authority to haul carriers in for a public hearing if their Colorado Option prices aren’t low enough. (Insurance companies are required to sell the Colorado Option at progressively lower prices for the program’s first three years — 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 being able to tell hospitals how much they can charge for a service, in order to drive Colorado Option prices down.
To health reform advocates, the hearings are where the benefit of the Colorado Option program really starts to kick in. And the regulatory authority on display in those hearings will make the Colorado Option even more enticing to consumers next year.
“Some in our health care system have been trying to avoid accountability,” Adam Fox, the deputy director of the Colorado Consumer Health Initiative, which supports the Colorado Option, said in a statement. “With this increased transparency, we will ensure the industry meets the requirements Coloradans deserve, which will make the Colorado Option plans that much more effective next year.”
Correction: This story was updated at 8:45 p.m. on Thursday, January 19, 2023, to clarify that, while the state had initially proposed displaying Colorado Option plans first in search results on Connect for Health Colorado, the decision was reversed prior to open enrollment. The story was also updated to make clear that some customers were shown a suggested Colorado Option plan but were not automatically signed up for it.