The landmark Inflation Reduction Act, signed into law by President Joe Biden earlier this week, brings a host of welcome changes when it comes to lowering health care costs.

For the first time, the law will allow Medicare to negotiate prescription drug prices for seniors and cap their co-payment for insulin at $35 a month.

For those under 65, the bill also brings welcome changes: It extends so-called “expanded” Affordable Care Act subsidies, which had become more generous since last year, until the end of 2025.

“I am grateful and extremely excited to plan to extend the three-year additional savings to our customers,” said Kevin Patterson, chief executive officer of Connect for Health Colorado. “In Colorado, these expanded subsidies lowered costs for 155,000 enrollees, reduced their average out-of-pocket costs by $900 per year, and resulted in increased enrollment in rural communities across our state. I hope the more than 200,000 Coloradans who rely on us to afford health insurance and get the health care they need can rest easy knowing that this level of financial assistance will continue for years to come.”

Open enrollment for next year’s plans begins Nov. 1 (you must select a plan by Dec. 15 for coverage beginning Jan. 1, 2023). “We expect the final rates to come out by mid-October,” said Monica Caballeros, chief spokeswoman for the state exchange. Expanded subsidies are “a pretty big deal,” she added. “There are quite a few factors that affect what someone’s premium will ultimately be, but these subsidies will provide people with continuity: this level of financial assistance will help to cushion any price rises.”

And price increases are likely on the way. Overall, there is likely to be about an 11 percent “overall average” premium increase in 2023, based on preliminary rate changes requested by insurers, said Vincent Plymell, assistant commissioner for communications at the Colorado Division of Insurance.

The same two carriers, Anthem and Rocky Mountain Health Plans (a United Health Care company) will return to sell plans in San Miguel County and Ouray County in 2023. Anthem has proposed raising premiums by 8.4 percent, and Rocky Mountain wants to increase them up to 13.4 percent.

The proposed changes are being evaluated by regulators: “My actuarial colleagues should spend their summer vacation digging into this,” Plymell said dryly. “Are these demands justified? Do they all add up? We push some things.” But the bottom line is, “There’s usually a bit of a difference” — not much — between an asking fee and a final fee.

“We’re pleased to see that the expanded subsidies that have been there will last” another three years, Plymell said. “When people don’t have insurance, they avoid going to the doctor — they avoid regular care and then some. When people delay care and chronic conditions become severe, they will end up in hospitals, which will have to pay off more of these costs, which end up being passed on to all of us,” Plymell said. In short: it is better for everyone to have health insurance if they can afford it. Next year brings a new plan, the so-called Colorado Option, which should help with that. “It’s often described as the ‘public option,'” Plymell said, but that’s a misnomer. “We drew up a standardized plan and put up handrails, but the transporters are implementing the plans, he emphasized. “This was not just an exercise to reduce premiums. We had a lot of meetings with stakeholders” including consumer advocates, providers, hospitals, health plans and more, “to determine what the important coverage options would be if you had, say, diabetes or hypertension .

“The idea was to bring value” to health management. “Not just to lower premiums.”

That said, premiums on Colorado Option plans are projected to be five percent lower in 2023, compared to premiums in 2021; 10 percent less in 2024; and 15 percent less in 2025.

“The law requires companies to lower the costs of these plans a little more each year,” Caballeros said.

“Because they are standardized, it will be much easier to compare plans between carriers,” Plymell added. “The promise of the Affordable Care Act — the idea behind the Gold, Silver and Bronze plans — was that it would be easy to rate them.” Ironically, though, “cost savings are often built into the Silver plan” compared to, say, Bronze. In contrast, “These are really easy to compare,” Plymell pointed out. “A Colorado Option plan from Anthem is the same as another company’s. The only difference will be the premium, and the plan’s networks of doctors and hospitals. People have very strong feelings about these things.”

Costs of “non-preventive” primary care visits, substance abuse health/mental health/behavioral health visits, prenatal and postpartum visits, and diabetic supplies (including continuous glucose monitors) in Colorado Option plans? Zero dollars. Said Plymell, “they are absolutely worth watching.”

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