Health Insurance Rates Are Dropping But So Is Choice in Rural Markets Like Eagle County

This article and photo were first published in the Vail Daily on November 19, 2019

While policymakers are celebrating a big drop in Colorado’s individual health insurance prices for 2020, they’re also scrambling to combat the sharp decline in the number of carriers in rural parts of the state where 22 of 64 counties have just one option on the Obamacare marketplace.

That’s the situation Eagle County finds itself in after Kaiser Permanente pulled up stakes for 2020, ceding the local individual market (about 3,000 people who don’t get insurance through their employer) to Anthem. Open enrollment for 2020 Anthem Obamacare plans runs through Dec. 15.

The bad news is Kaiser was cheaper than Anthem in 2019, with a family of five paying about $2,300 a month for a bronze plan with a $6,500 deductible— and Kaiser is now completely out of the mix after just four years. A similar Anthem plan ran about $3,100 a month in 2019.

The good news is that the same Anthem plan dropped by about 40% for 2020 due to the passage by the legislature of a reinsurance bill that covers the highest risk customers separately. A bronze Anthem plan with a $6,000 deductible for a family of five will cost $1,875 a month in 2020. But regulators concede that’s still way too high a price for Western Slope families.

If that family of five makes less than $120,000 a year, it qualifies for significant premium tax credits under Obamacare, while an individual must make less than $50,000 a year. But the high cost of housing, health care and living, in general, makes even those wages tough to survive on for the self-employed and small business owners in Colorado mountain towns.

And while non-compliant plans such as Cigna’s Freedom Life are now more of an option since the 2017 tax reform bill stripped out Obamacare’s individual mandate tax penalties, those plans typically don’t cover preventative care and can deny coverage for preexisting conditions. Those plans cost about $1,500 a month for a family of five but did not drop as a result of reinsurance.

Building a Framework

In recent weeks, state insurance regulators have been conducting meetings around the state to build the framework of a public or state option health insurance program to increase competition in underserved areas like Eagle County. They released a final report on the plan on Friday.

Lawmakers this coming session must finalize the details of what they’re calling Colorado’s “transformative” state option plan, but they say once it’s in place it could save Western Slope customers an additional 15% on their individual market premiums. The problem is the plan still needs state legislative approval and a federal waiver and won’t be available until 2022.

There’s been some significant pushback to the state plan from health care providers and insurance carriers, and the final report envisions the legislature giving regulators the authority to compel insurance companies to provide competition in underserved markets like Eagle County.

“The key is we want to make sure that if we have a situation in the future where a Kaiser or a different insurance company has made a business decision that they want to leave a particular part of the state, that we have the authority and the ability to make sure that those counties that could be impacted by that will still have competition amongst the insurance companies in this public option product,” Colorado Insurance Commissioner Michael Conway said.

That worries Dave Davia of the Colorado Association of Mechanical and Plumbing Contractors, whose organization offers a multi-employer health insurance product that covers about 8,000 Coloradans in the state’s construction trades.

While premiums have increased on average 10% a year statewide since 2011, Davia said his group has been able to hold those increases to 3.1% a year by focusing on the three prongs of access, cost and quality. Now he’s worried that with the state setting reimbursement rates through a public option advisory panel, all three of those factors will be impacted.

“My concern is the access is going to be cut because doctors, doctor networks and hospital networks may not want to take this insurance, or they’re going to take the insurance and then push the revenue that they’re kind of walking away from onto plans like ours,” Davia said.

“So that’s accessibility and then cost,” Davia added. “But overall, we also think there could be a play here for quality, because the high-quality doctor networks may decide this isn’t where they want to play anymore. And they may just decide to close their loop to the existing customers that don’t have this state option as kind of their basis for insurance.”

Vail Health Steps Up

While some individual hospitals and the Colorado Hospital Association are opposed to the current version of the public option plan — sponsored this past session by state Sen. Kerry Donovan, D-Vail, and state Rep. Dylan Roberts, D-Avon — Vail Health is working closely with the state to lower costs and make insurance more affordable.

Kim Bimestefer, executive director of the Colorado Department of Health Care Policy & Financing, said she met last week with Vail Health CEO Will Cook and Aspen Valley Hospital CEO Dave Ressler and was impressed by how both hospitals are trying to step up.

She was particularly optimistic about Vail Health’s work to help build an Accountable Care Organization dedicated to providing high-quality care for Medicare patients and its collaboration with groups like the Western Healthcare Alliance. She’s hopeful the Vail Valley will one day be held up as a model for lowering costs and increasing competition.

“So, I challenged both CEOs to say thank you so much for your leadership, but in the end, we have to control frequency. That’s utilization. We need to control unit cost. That’s reimbursement,” Bimestefer said. “I appreciate all the care coordination, but we need to get unit costs under control. Both of them gave commitments they’re working on it, and that’s what the communities need.”

Cook, via email, cited Vail Health’s efforts to cut MRI (magnetic resonance imaging) costs in half, support low-income patients with both the Mountain Family Healthcare Center and MIRA, its merger with Colorado Mountain Medical to add multi-specialty services and its support for the reinsurance legislation, as well as other legislative efforts.

“We are thankful for the substantial legislative work being done by Gov. (Jared) Polis, Sen. Donovan, Rep. Roberts, Insurance Commissioner Conway — and many others who are focused on helping the people and holding health care providers accountable— and look forward to working alongside them to help find additional collaborative solutions for our mountain communities,” Cook said.

Cook added Vail Health is also working with large, self-insured employers and insurance companies to lower rates and is partnering with the Vail Valley Partnership chamber of commerce on “a new entity called the Mountain Healthcare Coalition, which is exploring solutions similar to Summit County’s Peak Health Alliance.”

“Yes, we are targeting 2021 to have a Mountain Healthcare Coalition product on the market,” said Chris Romer, the Vail Valley Partnership’s president and CEO. “We have a pretty active steering committee made up of self-insured groups, brokers, and businesses, along with Vail Health and VVP, to help move this effort forward. It’s a pretty massive data project and we’re actively engaged to get something meaningful on the market by 2021.”

Care, Not Corporate Profits

Roberts and Donovan sponsored a bill last session that modernized state co-op laws to facilitate more co-ops like Peak Health and Romer’s upcoming Eagle County version of the plan. And Roberts said he’ll carry the House version of the next public option bill in the session that starts in January, confident all the kinks in the plan can be worked out.

“First and foremost, it will impact the major problem we have here in the high country of limited choices on the market by giving residents another, and possibly several, more affordable insurance options that will be 9% to 18% cheaper than today’s rates,” Roberts said in an email.

“Second, this plan is the first step at getting at holistic solution to what actually drives higher costs by making hospital and provider reimbursements more equitable across the state, ensuring that the money you pay for your insurance actually is spent on your care and not corporate profits …” Roberts added.