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New Colorado health insurance regions could bring down costs

The federal government’s approval of new health insurance coverage regions for Affordable Care Act policies sold in Colorado isn’t enough to quiet down the conversation about high health care costs in the mountains.

Last week, the U.S. Department of Health & Human Services approved a Colorado Division of Insurance request to shrink the 11 current geographic rating regions down to nine starting in 2015. The approval comes after months of controversy in Garfield, Eagle, Pitkin and Summit counties — the four counties that make up the current resort region that, according to a Kaiser Family Foundation Study, boasts the highest ACA health insurance premiums in the country.

Garfield County commissioners at one point threatened to sue the state if its residents and small businesses couldn’t get some relief from the premiums.



While the newly drawn regions should provide some savings on 2015 health insurance premiums, it’s just one small piece of complex puzzle of U.S. health care costs.

“I think it’s a win for Garfield County, no doubt about that,” said Garfield County Commissioner Tom Jankovsky.



He hopes the rates will come down next year as a result of the new regions, but he’s expecting to see some changes to rates across the board as part of the natural process of adjusting to the Affordable Care Act.

Garfield County, for example, has 2,000 more people on Medicaid today than a year ago. Those kinds of things factor in to overall health care costs. Hospitals who see more Medicare and Medicaid patients absorb costs because those federal assistance programs often fail to cover 100 percent of the billed costs.

And because insurance premiums are a reflection of the cost of health care, redrawing a few geographic boundaries is only buying time before a real solution can be found, said Ben Price, executive director of the Colorado Association of Health Plans.

“What people really can’t afford in that area is health care,” Price said. “You can move around the regions, and you’re essentially asking other parts of the state to subsidize the premiums, but that really just masks the overall problem.”

‘Right solution for now’

The Colorado Division of Insurance set the current rates last year based on 2011 health care claims data, said Commissioner Marguerite Salazar. The division didn’t have new enough data to make a different analysis, she said.

The feedback from the resort region counties flooded her office, with residents, county commissioners, state and federal legislators all weighing in.

“I felt like I needed to respond and do this and try to lower those excessively higher premiums we saw in the rural resort region,” Salazar said. “I do feel like it’s the right solution for now.”

She said the division can address only the insurance side, but without work to bring down costs on the provider side, “everything we’ve done is going to be for naught.”

Under the ACA, insurance premiums are based on four factors: geography, age, the type of insurance plan and whether or not the insured is a smoker. Insurance carriers in Colorado can charge up to 15 percent more for smokers, and up to three times more for older people vs. younger people.

But there’s no limit to the surcharges based on geography, said Eagle County Commissioner Kathy Chandler-Henry.

She said that while Obamacare has helped many Eagle County residents who were previously uninsured get insurance, it’s the middle-class folks — those who make more than 400 percent of the federal poverty level and can’t qualify for the Medicaid or Medicare assistance — taking the hit across the region.

“We’re really concerned about it from a personal and workforce level,” she said. “People aren’t going to be able to live and work here because they can’t afford health insurance.”

The newly drawn regions will help spread the costs out over the Western Slope, excluding Mesa County, which is in its own region, but Chandler-Henry knows it’s not enough.

“I’m hoping we can sit down with the providers and hospitals and work together,” she said. “I suspect there are some creative ways to work together regionally.”

Chandler-Henry and Jankovsky are trying to get appointments to a new state cost commission, which lawmakers approved this year and is scheduled to begin meeting this summer. The commission will be tasked with looking at what drives costs in the state and what can be done about it.

Price said the Colorado Association of Health Plans is “putting a lot of hope in that.”

Shop around

Salazar has enjoyed some praise this week since word of the approved new regions spread. She has also taken a fair amount of criticism from frustrated folks in the region.

U.S. Rep. Jared Polis, a Democrat whose district includes Eagle and Summit counties, sent comments to Salazar Monday, calling the change in the geographic rating regions a “significant step.”

“I am hopeful that this change will bring down the staggering premiums that residents of Summit, Eagle, Garfield and Pitkin counties are currently being forced to pay and allow Coloradans who live in mountain communities to take advantage of the same affordable rates for health care that their neighbors in Grand and Lake counties already enjoy,” Polis wrote.

People need to do their research when looking at health care options, said Pat Pier, a Carbondale insurance agent, financial adviser and president of the Western Region Association of Health Underwriters.

If consumers get as savvy about buying health care as they are about finding a good retail deal, officials throughout the resort region think it could force prices down.

A lack of competition in the mountains — from hospitals to doctors to insurance carriers — is another reason among many that keep costs high.

Chandler-Henry is hopeful a new carrier might enter the market — Kaiser — which would drive competition.

“The more insurance providers we can get, the better off we’ll be,” she said.

But that doesn’t mean those insurers will have better negotiating power with hospitals and doctors that lack competitors.

Salazar hopes all of the focus on costs might help the health care providers understand the severity of the dilemma, and perhaps they’ll be more willing to come to the table to negotiate lower prices, she said.

And all of the focus and controversy surrounding health care in recent months should also create savvy consumers, she said. “People will be more responsible,” she said. “I would hope people start realizing that somebody pays. The attitude of ‘I’ve got insurance and it doesn’t matter (what it costs),’ we have to get away from that.”

Lauren Glendenning is the editorial projects manager for Colorado Mountain News Media. She can be reached at lglendenning@cmnm.org or 970-777-3125.


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