Health insurance prices for some in Colorado will go up next year. Here's how much.

Health insurance prices in Colorado are set to climb again next year on the whole, but by a below-average amount, according to final, approved rates released Thursday.

But, as is often the case in health insurance, that doesn't necessarily mean your insurance prices are going to go up for 2025. In fact, Thursday's rates apply only to a subset of people who have private insurance coverage.

Let's dive in.

Who are we talking about here? Is it me?

Maybe. Or maybe not.

The state announced final rates for two subsets of the insurance market on Thursday. The first is the individual market, where people buy plans on their own. About 5% of Coloradans purchase insurance this way, paying for it without the help of an employer.

The second is the small-group market, which is a place for small companies to buy plans for their workers. About 50% of Coloradans get health insurance through an employer, but most of those are big companies, meaning they are either self-insured or they shop in the large-group market.

How much are prices rising?

Both the individual and small-group markets are made up of multiple companies that sell dozens of different insurance plans, so there's a lot of variability. But let's talk averages.

In the small-group market, rates are going up by an average of 7.1%. That's in line with the increases various surveys have forecast for employer-provided insurance in general.

In the individual market, rates are going up by 5.6% on average. That's less than the increases seen in previous years. It's also a bit below the average annual increase of the last decade in Colorado, which is 6.9%.

Ugh, health insurance is soooooo boring. Why should I care?

Because knowing about this stuff can save you money.

Every year when open enrollment comes around, a lot of people just let their current insurance plan renew. But you could be missing out on savings by not shopping around to find a lower-cost plan or a plan that works better for your needs.

"My advice this year is the same as it is every year — get out there and shop to see what plans are available for you and your families," Michael Conway, the Colorado insurance commissioner, said in a statement.

There's also a lot of financial help available for people shopping in the individual market. Those who qualify and who buy plans on Connect for Health Colorado, the state's insurance exchange, can receive subsidies that reduce the cost of premiums. About 80% of people who purchased plans on Connect for Health in 2024 qualified for financial assistance. About 77% of those folks will be able to buy a plan for 2025 with a monthly premium of $100 or less.

None of this applies to me. Why should I care?

How do you feel about in-depth policy analysis?

Eh.

Hear us out!

Gov. Jared Polis has staked a big chunk of his political reputation on being able to save people money — and especially save people money on health care. (He even created an office called the Office of Saving People Money on Health Care.)

When it comes to health insurance, there are two big programs the Polis administration has implemented. And these annual rate announcements provide a chance to check on whether those programs are working.

I'm listening…

One of these is a program called reinsurance, which was created in Polis' first year in office. It's basically a program that pools state fees and federal dollars to provide insurance for insurance companies, protecting them from the potential financial impacts of their highest-cost claims.

That allows insurers to reduce prices for everybody.

I'm no longer listening.

As boring as the mechanics may be, this program has had huge impacts in the individual insurance market, helping Colorado reduce premium prices that were once among the highest in the nation. Colorado's individual-market prices are now below the national average.

Every year, the Polis administration asks insurers to submit two sets of rates: one for what they actually want to charge and one for what they would charge if there were no reinsurance. This allows the state to calculate the savings due to reinsurance.

For 2025, the Polis administration estimates that reinsurance will save consumers $493 million through reduced health insurance premiums. In some counties on the Western Slope, premium prices would be as much as 44% higher in 2025 without reinsurance.

"These continued savings put money back in the pockets of hardworking Coloradans to spend on other essentials or in our strong local economies across the state," Polis said in a statement.

Reinsurance led to a big drop in prices starting in 2020. Those premium prices have been creeping back up in recent years. But, even if you account for the 5.6% average increase, next year's prices look like they will on average remain slightly below where they were when Polis took office.

Insurers say they also deserve some credit here — after all, they are the ones putting the rates together and negotiating deals with hospitals and drug-makers to do so.

"The 2025 rates reflect our commitment to provide savings to consumers, while ensuring that our plans remain sustainable in the face of rising healthcare costs," Kevin McFatridge, the executive director of the Colorado Association of Health Plans, an insurer trade group, said in a statement. "Our member companies have worked tirelessly to manage increases in medical and pharmaceutical prices and provide valuable choices for Coloradans in both the individual and small group markets."

What's this Colorado Option thingy?

It's the second major Polis program to tinker with health insurance.

The Colorado Option is a state-designed insurance plan that private insurance companies must make available to consumers. The goal is to provide higher-quality coverage at lower costs, and there's various rules and mechanisms to try to keep Colorado Option rates especially low.

Is it working?

This one is less clear.

Prices for Colorado Option plans are going up next year, but not as much as other plans. According to the state, the prices on Colorado Option plans will increase on average by 4.6% for 2025. Non-Colorado Option plans will increase on average by 6.1%.

The Polis administration says that the average person in an average-priced plan could save a couple hundred dollars a month by switching to the lowest-cost Colorado Option plan available in their area. If everyone did this, the statewide savings would be $235 million.

What's the unclear part?

The law that created the Colorado Option promised very specific price-reductions that Colorado Option plans were supposed to hit.

For 2025, Colorado Option plans were supposed to be priced 15% below 2021 prices, after accounting for inflation. But the Polis administration did not say Thursday how many plans had actually met that target.

Instead, it provided two stats. First, it said that a Colorado Option plan will be either the lowest-cost or the second-lowest-cost plan in 90% of Colorado counties in 2025 — when you're talking about bronze- or silver-level plans. For gold plans, a Colorado Option plan will be the lowest-cost plan in every county.

Second, the Polis administration said that everybody shopping in the individual market will have access to a Colorado Option plan that either met the price-reduction targets or "reduced reimbursement rates between hospitals and carriers."

There are limits to what the commissioner of insurance can do to force Colorado Option plans to hit those price targets. So, while it's unclear how many plans succeeded in reducing their prices by the required amount, it's also unclear what the state will be able to do to those that haven't.

When does open enrollment start?

You're done with the policy talk, aren't you?

Just give me the info.

Open enrollment for the individual and small-group markets starts Nov. 1 and runs until Jan. 15. If you want coverage that kicks in Jan. 1, you'll need to select a plan by Dec. 15.You can start window shopping for plans now, either through a health insurance broker or on Connect for Health Colorado's website.