Only one of the eight payers operating in Colorado's new state-sponsored plan will meet state benchmarks to reduce premiums by 5 percent this year, according to a report from the Colorado Consumer Health Initiative.
Colorado Option is a state-sponsored exchange that requires payers to offer premiums at lower costs to individuals and small businesses with fewer than 100 employees. The state received approval from HHS to implement the program in June.
The Denver Post reported Sept. 19 that these plans are expected to reduce premiums by 5 percent for 2023, decreasing by 10 percent in 2024 and 15 percent in 2025. However, the 5 percent requirements are not enforced by the state this year, the newspaper reported.
Denver Health was the only payer that met the Colorado Option requirements for this year, based on proposed rates, the Colorado Consumer Health Initiative Found. Kaiser kept premiums the same this year, while other payers increased rates for at least some of the plans they offer.
"Most carriers failed to meet the required premium reductions in the initial filings on some, if not all, of these plans. The reasoning behind this is all relatively weak and requires a considerable amount of scrutiny," the group wrote in its report.
The rates will be finalized in mid-October and are expected to be lower than the proposed rates.
The Denver Post reported there is no penalty for plans that do not meet the 5 percent reduction this year, but if the 10 percent target isn't reached by 2024, the state can hold hearings to determine why.
A spokesperson for the Colorado Association of Health Plans told Becker's in June the group is concerned about meeting the targets for premium reductions.
"CAHP remains concerned about the ability of carriers to meet the premium target reductions given the standardized plan benefit design, the lack of appropriate credit for current inflationary trends, and the outstanding rate setting process for providers," the spokesperson said.