Allen G. Breed/AP Photo
Coloradans enrolling in individual health insurance plans for 2025 could see an average premium rate increase of around 5%, according to the preliminary health insurance premium rates proposed by Colorado’s health insurance companies.
Small-group employers could see an average premium increase of around 8%.
Colorado’s Department of Regulatory Agencies’ Division of Insurance released the proposed rate increases in July, closing a public comment period on Wednesday, Aug. 14. The division reports that the final plans and premiums will be approved in mid-October.
Adam Fox, deputy director of the statewide nonprofit advocacy group Colorado Consumer Health Initiative, said that these increases were something to be “cautiously optimistic about.”
“We’re seeing a lower average increase this year than we did last year. Most of the increases last year were sort of in the 8% to 11% range in the individual market,” Fox said. “In general, that’s better for Coloradans, obviously, but what we also know is that people are still struggling with health care costs and affordability, so any increase is an area of concern.”
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In the preliminary 2025 rates, Colorado Option plans proposed an average rate increase of 4% compared to 6% for non-Colorado Option plans.
Colorado Option plans were first initiated in 2023 to create a lower-cost option for individuals and small employers (defined as those with 99 or fewer employees).
And while plans are not finalized, Vincent Plymell, assistant commissioner for communications and outreach for the Division of Insurance, said the state “can confidently say that Colorado Option plans will be the lowest cost plans across metal tiers (Bronze, Silver, Gold and Platinum) in the vast majority of the state once again.”
According to the Colorado Consumer Health Initiative, the lowest cost Colorado Option plans are 10% cheaper than non-option plans in many places throughout the state in the preliminary rates.
Among the proposed increases for individual premiums, Anthem — the largest carrier in Colorado — filed for the smallest proposed increase at 1.1%. However, Anthem had the highest-proposed increase for small employer groups, proposing a 14.43% jump in 2025.
Other providers — Denver Health Medical Plan and Rocky Mountain HMO — proposed increases above 8% in the individual market, while the proposed rates for Cigna, Select Health and Kaiser Foundation Health Plan fall between 7% and 8%.
The “more significant” increases in the group market, including Anthem’s proposal, are “concerning,” Fox said.
“That really presents some challenges for small businesses that are trying to provide health insurance to their employees. There’s more work that needs to be done to address sort of the affordability challenges in the small group market,” he added. “We’ve seen sort of relatively steady 7% to 10% increases year after year in the small group market. And that is not really sustainable for most small businesses.”
The lowest proposed rate in the small group market is a 3.63% increase from Kaiser Permanente. Kaiser Foundation, United Healthcare Insurance Company and United HealthCare of Colorado all have proposed rates between 6% and 7%.
Fox noted that any advocacy on these rates requires striking a balance, “trying to make sure that we keep (rates) as low as is practical for consumers on the market …We want to make sure that the insurers are stable as well.”
Higher elevation, higher premiums?
The preliminary rates released by Colorado’s Division of Insurance do not include rates based on county or region. However, Fox said it’s likely the state will see “a similar level of variation between rating areas, though average rate increases this year are smaller than last year.”
“That generally means the average rate change in rural/western parts of the state tends to be higher than other parts of the state, but it varies how much year to year,” Fox said.
In 2024, the Western rate region — which encompasses all Western Colorado counties except Mesa County — saw an average increase in individual premiums of 9.5%, slightly below the average statewide increase of 9.7%. Within the region, Routt County saw an average increase of 11.1%, Eagle County saw a 10.5% increase, Summit County a 10.3% increase, Grand County a 10.2% increase, Pitkin County a 8.7% increase and Garfield County an 8.6% increase.
For small group plans, the average increase across Colorado’s Western counties was 9.6% compared to a state average of 8%. Within this region, small group increases were 11.1% in Eagle County, 10.4% in Summit, 10.1% in Routt, 9.3% in Pitkin, 9.1% in Grand and 7.3% in Garfield.
Regardless of the rate increases, “premiums have always been higher in the mountain and rural parts of the state,” Fox said.
“The general justification for that is that the costs of providing care in those areas is higher. There aren’t as many health care resources, and the costs for the resources that do exist tend to be higher in those areas,” Fox added, noting that there may be other reasons at play — higher utilization, for example — that have yet to be fully explored.
According to the 2024 Connect for Health Colorado open enrollment report, counties in the central I-70 mountain corridor had some of the highest average premium rates in the state. Connect for Colorado is the state’s health exchange marketplace, where the majority of individual plans are purchased.
For individuals who received financial assistance and health insurance tax credits, Grand County had the second-highest average net premium in the state at $174.04. Summit and Pitkin counties were among the top 10 highest with rates of $164.05 and 168.10. Eagle County’s average rate was $132.08, Routt’s $135.17 and Garfield’s $147.68.
For individuals enrolling through Connect for Colorado without financial assistance, the average premium rate in 2024 for these counties all fell within the top 50% of the state. Pitkin County’s average rate was $613.15, Grand County’s was $604.24, Garfield County’s was $582.83, Eagle Couny’s was $565.07, Summit County’s was $539.63 and Routt County’s was $550.53.
As a result of these higher costs and premiums, individuals on the Western Slope lack health coverage at a higher rate than other regions of Colorado. The 2023 Colorado Health Access Survey reported that the “Interstate 70 mountain corridor, Mesa County, and southwest Colorado had the highest uninsured rates — a problem that has gone on for more than a decade.”
The survey reported that 12.6% of individuals in the I-70 mountain corridor — which encompasses Garfield, Pitkin, Eagle, Summit and Grand counties — were uninsured, making it the highest percentage in the state. In the survey, individuals predominantly reported that cost was the primary reason for being uninsured.
Mountain Family Health Centers — which is the federally qualified health center for Eagle, Garfield and Pitkin counties — reported that over 47% of its visits are from uninsured patients. This number has increased by over 10% in 18 months, according to information provided by Emily McGavin, the director of development for Mountain Family.
Sharing data from the Health Center Program Uniform Data System, McGavin reported that of the three counties it serves, Eagle County has the highest rate of uninsured patients at 48% compared to an average of 46% in Garfield and Pitkin. Between 18% and 19% of Mountain Family’s patients in all three counties have private insurance. Thirty-two percent of its Eagle County patients are on Medicaid or public insurance, compared to 27% in Pitmen and Garfield.
Putting in the policy work
While the 2025 proposed rates still represent an increase over the previous year, Fox’s optimism in part relates to recent policy changes.
“We’re seeing more moderate increases this year,” Fox said. “That to an extent, speaks to some of the policies that we’ve tried to put in place at the state level to put downward pressure on health care costs and health insurance premiums.”
Reinsurance
Both Fox and the Division of Insurance pointed to Colorado’s reinsurance program as one reason for the slowed increases. The state’s first reinsurance bill passed in 2019 and was designed to subsidize high-cost claims for insurers.
“That helps them sort of defray those really high-cost claims that are sort of an outlier in the claims overall but can have a potential outside impact on premiums sort of in the future,” Fox said.
In 2025, individual market insurance premiums would be 25% higher without reinsurance, Plymell reported.
“That is just an average — the Reinsurance Program is designed to save the Western Slope even more,” he added.
Fox said that since 2019, reinsurance has had a “bolstering effect,” by providing “a little bit of additional stability in the marketplace.”
“Particularly for rural areas (reinsurance) helps contain some of the higher premiums that we saw prior to reinsurance going into effect,” he added. “Reinsurance has really helped decreasing some of that variation and volatility.”
The Colorado Option
The introduction of the Colorado Option plans is also “encouraging health insurers to try to contain and lower premiums on those plans,” Fox said.
Between the first and second years of these plans, the state saw a 188% increase in enrollment in the Colorado Option. This increase was reflected in the mountain region as well. The Division of Insurance reported that enrollment in the Colorado Option increased from 2023 to 2024 as follows:
- From 792 to 2,351 in Eagle County
- From 267 to 864 in Grand County
- From 249 to 786 in Pitkin County
- From 421 to 1,089 in Routt County
- From 1,010 to 1, 725 in Summit County
Premium tax credits
While these policy efforts have helped drive premiums down, a federal tax credit program has also had a significant impact on individual rates.
The American Rescue Plan and then the Inflation Reduction Act increased the premium subsidies for all income groups. For individuals under 150% of the Federal Poverty Line, they became eligible for $0 plans. These acts also removed a cap for financial assistance of 400% of the Federal Poverty Line and reduced all premium contributions.
Fox said this “has helped essentially everybody who has access to the tax credits under the new structure, and it’s lowered premiums for everybody by doing that.”
The tax credits — received through Connect for Health Colorado — do also generally insulate individuals from some of the annual premium increases, Fox said.
“The tax credits adjust as premiums increase,” he added. “The tax credits help protect consumers from rate increases, but consumers may have to change plans in order to avoid an increase in what they pay out of pocket and to maximize the protection the tax credits provide.”
In addition to saving money, the credits also “spurred an increase in enrollment,” Fox said.
“We’ve seen thousands of rural Coloradans gain access to coverage because of that expansion in the tax credits,” he added.
The tax credits are set to expire at the end of 2025.
“We’re very concerned,” Fox said. “The sooner that our members of Congress address that, the better, because that has really had a very meaningful impact for rural Colorado. If those go away, we’re going to see the most harm be done to rural Colorado.”
With changes coming, Fox reiterated the importance for all consumers to shop around during open enrollment.
“Since premium changes are different on specific plans, it’s important for consumers to shop,” he said “The amount they can receive in premium tax credits may increase depending on the rate increases in their area, but if a consumer’s plan increases more than other plans, the consumer could end up paying more out of pocket for their premiums if they don’t shop around.”
