No health insurance cost relief seen in study
DENVER — The high price of High Country healthcare is driving insurance costs, not the number of people in the pool.
State lawmakers ordered the Colorado Division of Insurance to determine if lumping all of Colorado into a single rating area would lower insurance prices in Western Colorado. It won’t, the agency reported this week.
While some believed that the lack of population in the High Country made our insurance pools more expensive, that’s not what the study determined. It’s not the number of people, it’s the high price of care.
“Moving to a single geographic rating area will have no impact on healthcare costs, and without tackling these costs, there is little hope of bringing down health insurance premiums,” The Division of Insurance reported.
“It should not come as a shock to anyone in Eagle, Pitkin, Garfield or Summit counties,” said Bethe Wright, who owns and operates Wright Insurance.
How this started
When the Democratic-controlled Congress in 2010 passed the federal Affordable Care Act and President Obama signed it, the bill mandated that rates be set according to geographic areas.
That system led to Eagle, Garfield, Pitkin and Summit counties having the nation’s highest health insurance rates.
The four counties were lumped in with most of Western Colorado, which stabilized this region’s health insurance costs, but raised costs in the rest of Western Colorado.
Our health insurance costs are still the highest in Colorado at $5,532 per member. That’s 36 percent higher than Boulder’s $4,073, the state’s lowest cost.
There are more health insurance options on the Front Range, and that’s a big part of the reason why their rates are lower, Wright said. Going to a single rating area could actually result in some insurance carriers leaving the state, the study said. That would only drive costs higher.
A single geographic rating area could end up harming the very citizens it is trying to help, Colorado Insurance Commissioner Marguerite Salazar, said.
“People in the mountain areas could be facing even higher premiums, or could be left without any insurance options,” Salazar said. “A move to a single geographic rating area would be an attempt to treat a symptom rather than finding a cure.”
High Country, high cost
The Division of Insurance research took into account four areas of healthcare costs: inpatient admissions, outpatient visits, professional visits and prescriptions.
Western Colorado had the highest costs in three of the four areas, landing in the middle of the pack only in prescriptions.
“The study confirms the stories we have been hearing for more than two years — that the costs really are that much more expensive in the High Country than they are in other areas of the state,” said state Sen. Kerry Donovan, D-Vail. “Now, no one can dispute that fact.”
As part of the legislative package, Gov. John Hickenlooper appointed a commission to come up with possible solutions, and to present them in December, just before the state legislature convenes in January.
“We all know things cost more in the mountains. But are our healthcare prices justified to be that much higher?” Donovan asked.
Among the commission’s early ideas:
• Possible subsidies for people who are caught between health care costs and salaries that won’t pay those costs.
• Establishing a range of prices for what could be charged for procedures, instead of letting geography be the determining factor.
• Transparency that would enable consumers to look up what procedures cost in different locations.
“We turned around the study in a matter of months, and we’ll turn around the first set of solutions by the end of the year,” Donovan said.
Donovan said those seeking changes to the system hope to make some difference by 2018.
Since Obamacare became the law of the land, there have been numerous stories that skyrocketing rates are forcing some people to pay more for health insurance than their mortgages.
“These can no longer be dismissed as unique, one-off examples,” Donovan said. “This study shows it’s a reality for many, many of our neighbors.”
Staff Writer Randy Wyrick can be reached at 970-748-2935 and firstname.lastname@example.org.