Health bill aims to re-envision insurance subsidies for rural communities
DENVER — As health-care policy remains in flux at the federal level with the proposed Obamacare replacement working its way through Congress, state lawmakers are plugging away in attempts to make coverage more affordable in the existing system.
Last week, Reps. Diane Mitsch Bush, D-Eagle/Routt, and Millie Hamner, D-Summit/Pitkin, introduced House Bill 17-1235 with an eye on mountain communities on the Western Slope. The “Financial Relief to Defray Individual Health Plan Cost” bill aims to expand who qualifies for a federal subsidy under the Affordable Care Act, up to 500 percent of the federal poverty level from the present 400 percent.
For 2016, 400 percent totaled roughly $47,500 for an individual and $97,000 for a family of four. At 500 percent, that would raise the threshold to about $59,000 for an individual and $121,500 for a family of four. If passed, then the new law would create a financial relief account to draw from for those who meet those requirements and spend more than 15 percent of their annual income on insurance premiums for a bronze, silver or gold plan on the state exchange. An individual or family who has access to an employer- or government-sponsored health plan would be ineligible.
“This is a middle-class kind of a bill,” Mitsch Bush previously explained when the proposal was still in draft form. “Folks literally can’t pay their insurance premiums. They have already made the decision to not be enrolled on the health exchange and to pay the penalty. With this, the premiums would still be high, but at least this provides a small subsidy.”
Approximately 15 percent of the state’s population is uninsured, according to data from the Colorado Health Institute. Those numbers are even higher in many mountain communities and closer to 17 or 18 percent in counties including Summit, Eagle, Pitkin and Routt, where premiums are substantially more expensive than on the Front Range.
“Because of the financial burden high-cost health insurance places on individuals in rural areas of the state,” the bill reads, “a considerable number of these cost-burdened individuals may not purchase health insurance. It is therefore important to establish a program to provide temporary financial relief.”
The law, co-sponsored in the state senate by Sens. Don Coram, R-Montrose, Larry Crowder, R-Alamosa, and Kerry Donovan, D-Vail, would call on insurance providers in the health exchange to take part in a one-month special enrollment period so those who would qualify — and who initially skipped signing up for 2017 due to costs — may now obtain insurance. Those people would then be a part of the standard open enrollment for the 2018 insurance year.
Mitsch Bush said the main goal with the law is to offer it as essentially a Band-Aid in the short term while bills which address long-term, structural changes can be enacted to help even out premiums across the state. The fund to assist this specific group would come from money appropriated from the state’s general fund, be paid on a quarterly basis to ensure someone remains insured throughout that period and cease to exist at the close of 2018.
Strictly looking at the federal poverty rate and a 15 percent expenditure as the method for determining health-plan subsidies is a component Summit County Commissioner Dan Gibbs believes can be misleading, which is why he supports increasing the poverty rate restriction of the relief bill. The cost-of-living from one region to another can vary greatly, as does the price of insurance plans in those respective locales. So why, he asked, not factor what it costs to live in a place for how government assistance is established in ensuring proper health coverage?
“It’s another way to skin a cat, looking at cost-of-living index for the state,” Gibbs said. “This bill falls in line with that and for those living in high-cost regions like the mountains, this bill is very beneficial to these people.”
more people means more power
The proposal, which will first be heard by the House Health, Insurance and Environment Committee on March 30, is one of a package of other health-related bills this legislative cycle. The prospect of changes at the capital in Denver, rather than allowing the reshaping of the state’s health-care policies solely from Washington, is something which has Gibbs optimistic.
One bill among those which may wind up on the state docket soon would allow local governments and districts, from counties and towns to fire departments and school systems, to join the same health-care plans as state employees, and it could save the insured thousands of dollars a year. The idea is to widen the risk pools so providers can charge lower rates across a larger cross section of people, so all can see savings.
“More people means more bargaining power, and equals cheaper rates,” Gibbs said.
Whether state legislators will see a submission this session to transition the entire state to a single geographic rating area, rather than the current nine, thus creating consistent premiums across Colorado, is still up in the air. The focus of bill sponsors on the financial relief bill is what can be accomplished now.