New bill aims to cut area insurance costs

EAGLE COUNTY — Chris Neuswanger’s health insurance bill has more than doubled in the past two years. He’s not alone.

Individual health insurance customers in the mountain resort region that includes Eagle, Summit, Pitkin and Garfield counties pay some of the highest rates in the nation. That’s because of a provision in the 2010 Affordable Care Act that allows states to establish insurance risk pools in specific geographic areas. Several factors, including the cost of care in the area, means that insurers are able to charge customers who live in those high-cost areas more.

Several legislators from the area — State Representatives Diane Mitsch Bush, Bob Rankin and Millie Hamner, along with Senator Kerry Donovan — have sponsored a bill that would create a state study of those costs and whether the entire state could become one geographic area for insurance purposes.

Normally, a bill that authorizes a study wouldn’t be particularly big news. This bill is different.

First, that study could result in action in this calendar year.

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Donovan said the bill — House Bill 1336 — directs the Colorado Division of Insurance to have its study complete by Aug. 1. After that, the state agency can act without legislative direction.

“We need to find out what’s truly driving costs,” Donovan said.


In addition, Donovan said other legislators and state officials need to hear from people in the resort region about how insurance costs are affecting their lives.

“We aren’t all rich second-home owners,” Donovan said. “We need to overcome those perceptions.”

Neuswanger, an Avon-based mortgage broker, is part of the strategy of sharing the stories of regular people with state legislators. Along with representatives of other resort counties, Neuswanger and Eagle County Commissioner Jill Ryan will testify at a Thursday hearing about the bill.


Neuswanger also hopes he can take a stack of petition signatures to Denver on Thursday, and he has set up a website for people to weigh in with their support and their own stories.

Neuswanger set up the site on Saturday and said he’s already received a good handful of signatures just by sending emails and texts to people on his contact list.

Neuswanger said besides his own insurance bills — which now have a monthly rate nearly double that of a similar customer in Denver — he talks regularly with people in similar situations.


Mitsch Bush said she’s been working since 2013 to somehow change the resort area’s insurance rating. She said the idea for one rating area for the entire state came up in conversations with Colorado Insurance Commissioner Marguerite Salazar.

Part of the idea behind the single rating area is that people in the mountains often travel to the Front Range for medical care.

Conversely, people who ski in this area but live on the Front Range can often come here for orthopedic work.

Lee Froman, of Brill Insurance in Avon, said that’s possible unless a customer’s policy has a geographic restriction on where he or she can get care.

Froman said this house bill is a first step toward making health insurance more affordable for resort-area residents, but there’s more to be done.

One of the other major factors is the cost of care in the resort areas. For instance, Froman said a magnetic resonance imaging scan of a lower joint can cost $1,500 to $2,000 in resort areas. The same procedure in Denver can be done for $500 in some places.

Similarly, Froman said one of his clients recently spent one day at the hospital in Vail, then a week at a hospital in Denver. The bill for the one-day treatment added up to $30,000, while the week in Denver billed out at $50,000 he said.

On the other hand, Froman said, it’s not unusual to have a 25 percent price variation for the same procedure for Denver-area hospitals not far from one another.

That’s why finding out why certain areas are approved for higher rates can be useful, Froman said.

“This could provide true data about costs.”

What’s certain, though, is that health insurance costs in the resort areas are rising faster than those on the Front Range.

Ryan said she hopes this legislation can help provide some relief for Eagle County residents.

“In my testimony I’m going to couch this as a workforce issue,” Ryan said. “With the cost of housing, child care and health insurance premiums, at some point people can’t afford to live here.”

Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, or @scottnmiller.

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