Colorado’s reinsurance program will save people who buy their health insurance on the individual market an estimated $493 million next year, compared to how much premiums would have risen without it, according to the Polis administration.
Statewide, premiums on the individual market will rise by an average of 5.6%, while they will increase about 7.1% for small-group plans.
Reinsurance is a backstop that limits how much insurance companies have to pay out for the relatively small number of people who have highly expensive medical needs each year. Since they aren’t on the hook to pay out as much, the companies charge lower premiums, which in turn means the federal government doesn’t have to spend as much on tax credits to people buying insurance on the marketplace. Colorado got permission from the federal government to use those federal savings to further lower monthly premiums.
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A news release from Gov. Jared Polis’ office estimated that premiums in 2025 will be about 24% lower than they would have been without a reinsurance program. The amount any customer would save depends on where they live, their age and how many people in their family need coverage.
A 40-year-old buying individual coverage would have an average savings of $1,500 over the course of a year. People living on the Western Slope would save more, while the change was smaller near the Front Range.
Open enrollment on the marketplace begins Nov. 1 and runs through Jan. 15.
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