Federal Report Says Colorado Individual Health Insurance Market Is Healthy and Stable

July 11, 2017
Contact: Luke Clarke 720-496-2545

Colorado’s ‘risk score’ in 2016 is the country’s lowest, with expected healthcare costs 25 percent below the national average, countering claims of collapse in the individual market

DENVER — A recent report from the Centers for Medicare and Medicaid Services (CMS) provides national data that detail the stable health mix among individuals and families who buy their own health insurance and it scores Colorado ahead of all other states.

The report, “Summary Report on Transitional Reinsurance Payments and Permanent Risk Adjustment Transfers for the 2016 Benefit Year,” found that the Affordable Care Act (ACA) “functioned smoothly” in 2016 as the market for families and individuals buying their own health coverage continued to grow.

“This report provides convincing evidence that the individual markets are stable and are not collapsing,” said Kevin Patterson, executive director of Connect for Health Colorado®. “The federal data demonstrate that individual markets are attracting a balanced risk mix, not just in Colorado but across the country. This is important to keep in mind as Congress considers national healthcare policy.”

The report calculates an “average risk score” for states. Colorado’s score of 1.26 compares to the national average risk score of 1.69. That means the overall healthcare costs for Coloradans buying their own insurance — including those who buy through Connect for Health Colorado and those who buy directly from health insurance companies — are expected to be 25 percent lower than the national average, based on age, sex and health. A lower risk score indicates a healthier mix of people buying insurance.

The federal Centers for Medicare and Medicaid Services compiles the data as part of federal programs to protect health insurers whose members have higher than average cost for their care.

Lower risk scores are common in states who operate their own marketplace, as Colorado does. Those states averaged a score of 1.52 in 2016. The scores did not change dramatically in 2016 from 2015, another indication of stability in the individual market.

However, Colorado’s 2016 score was improved from 1.37 in 2015. The scores for all states can be found here for 2015 and here for 2016.