There are lots of possible reasons being tossed around to explain the higher-than-average rate increase expected in the employer group health insurance market here in Colorado, but nobody has pinpointed any single driving factor. Some suggestions are the higher percentage of uninsureds here, which does drive up the cost of health care (and thus health insurance), and the relatively high percentage of small businesses operating in Colorado, compared with other states. The Gazette article posits that perhaps the large number of small businesses is a factor because they don’t have the bargaining power that large businesses command when it comes to negotiating health insurance rates. That is true, but there’s another big factor that I haven’t seen mentioned in the reports about the expected rate increases: House Bill 1355. Of the admitted very small survey of our small group clients three quarters of them will be getting a rate increase because of HB1355 (none will see a rate decrease). This is in addition to the normal rate increases that groups see every year.
Because nearly two thirds of small businesses in Colorado currently receive a discount on their health insurance based on health and claims history, and because any such discounts will be disappearing in January because of HB1355, I think this could be playing a significant role in the premium increases that Colorado employers will be facing next year.
