Officials look to stabilize health insurance costs as Affordable Care Act sign-up kicks in
November 11, 2017
Obamacare is still the law of the land as open enrollment enters its third week, but the fact that Republicans tried and repeatedly failed to replace the Affordable Care Act this summer does not mean health insurance rates have stabilized for the individual market.
In fact, rates for the self-employed and small-business owners — especially in rural areas such as Colorado's Western Slope — continue to spiral out of control as the Trump administration takes steps to dismantle former President Barack Obama's signature health care law.
In the wake of President Donald Trump's recent executive order scrapping the Affordable Care Act's cost-sharing reductions, House Speaker Paul Ryan is now talking about repealing the law's individual mandate via the GOP's pending tax reform bill.
Democrats and many industry observers say such moves are further destabilizing Obamacare and are calling for bipartisan solutions to fix the Affordable Care Act and shore up the individual marketplace. That's especially true in rural Colorado, where mountain resort counties have been saddled with some of the highest individual market rates in the nation the past several years.
"The approach in D.C. seems to just be to sabotage the entire program," state Sen. Kerry Donovan, of Vail, said. "Instead of saying, '(The Affordable Care Act) fixed some things, it's working great in some areas, it's not working great in others, let's do what government is supposed to do and address the areas where it's not working and try to fix those,' the approach they're taking is not productive."
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People like many aspects of the Affordable Care Act, Donovan adds, pointing to popular parts of the law such as coverage for pre-existing conditions and the ability to keep children on a parent's plan until the age of 26. But she concedes it's had some "perverse consequences" for the individual market.
In Eagle County, a family of five with teenagers will pay $2,040 a month for a Kaiser plan or $2,877 for an Anthem plan on the individual market, according to insurance broker Bethe Wright, of The Wright Insurance Co., in Eagle. But if that family keeps its net income below $115,120, it would qualify for a $1,680 a month Advanced Premium Tax Credit under Obamacare, so monthly premiums of around $360 to $1,200, with a $5,500 deductible.
"Those that don't get tax credits are going to be struggling," Wright said, who added rates would likely go up another 6 percent to 10 percent as insurance companies pass on the loss of the cost-sharing reduction subsidies. "Small group is still less expensive than individual, so we will see more small businesses flocking back to group plans in 2018."
But to get small-group insurance, you have to run a company with at least one unrelated employee, so sole proprietors such as freelance journalists need not apply.
"In mountain communities, the living wage doesn't always match with the federal numbers for subsidies and who should qualify for additional support," Donovan said. "So, they're going to be the ones who are impacted the most by the two different Trump administration policies, because we're going to see prices rise but they're still not going to qualify for a subsidy."
Donovan is working on reviving a state subsidy bill that was killed in the Colorado Senate last session and would have provided relief to the 8 percent or so of mountain dwellers who don't get health insurance through their employers. State Rep. Dylan Roberts, recently named to represent Eagle and Routt counties, said he would support such a bill in the House.
Democratic former state Rep. Diane Mitsch Bush, whom Roberts replaced, managed to pass the state subsidy bill in the House last session, only to see it sent to a kill committee in the GOP-controlled Senate, despite the fact it had two Republican Senate sponsors from rural districts.
The bill would have temporarily expanded the subsidy eligibility pool by establishing a fund for those paying more than 15 percent of their annual income for a plan purchased on Connect for Health Colorado, the state health insurance exchange.
Currently, Affordable Care Act subsidy eligibility is capped at 400 percent of federal poverty, or about $47,000 for an individual and $97,000 for a family of four. The Mitsch Bush bill would have increased that number to 500 percent of federal poverty, or $59,000 for individuals and $121,000 for a family of four.
Without an Affordable Care Act subsidy, many self-employed Coloradans are simply absorbing the Affordable Care Act individual mandate penalty, which is either $695 per adult or 2.5 percent of a person's income. But Wright said that's incredibly risky in the event of a catastrophic health issue.
Asked if Donovan thinks she can get something passed in time to help 2018 consumers, she said it's all about funding: "Depending on the way I draft it, and if we could get the budget aligned, we could impact 2018 if it was something like a subsidy. If it was a policy change, it wouldn't impact until the following year."
Roberts also wants to revisit the idea of geographic neutrality in setting up insurance zones at the Colorado Division of Insurance, which regulates the industry at the state level.
"Part of the reasons these costs are so high for the mountain region is because all the mountain counties are in a zone together," Roberts said. "Either trying to … redraw the lines and make less zones so we're in the same zone as Grand Junction or Pueblo, or getting rid of them altogether and make the state one level playing field."
But that means Front Range prices would go up slightly while rural Colorado rates would fall dramatically, and it also means getting support from lawmakers in urban areas.
No help from D.C.
Meanwhile, don't look for any help from Washington. Bipartisan plans such as Hickenlooper-Kasich and bipartisan bills such as Alexander-Murray appear to be going nowhere in the hyper-partisan atmosphere inside the Beltway.
Last month, Republican Colorado Sen. Cory Gardner introduced the Healthcare Tax Relief Act to continue for one more year the ongoing suspension of Obamacare's Health Insurance Tax, a fee paid by insurers on health-policy premiums. Gardner recently testified about his bill on the Senate floor.
"Without congressional action, this tax will cost individuals and families hundreds of dollars. I expect to have broad bipartisan support on this legislation and will do everything I can to move it forward," Gardner said via a spokesman, adding he's monitoring and weighing bills such as Murray-Alexander and Hatch-Brady aimed at shoring up Obamacare in the short term.
"There are some proposals being discussed that would try to make short-term fixes to slow the increase of premium prices," Gardner said. "I'll look at them and any other measures that try to fix this law, but we still need permanent solutions."
Connect for Health Colorado officials said they launched Affordable Care Act open enrollment Wednesday, Nov. 1, "with encouraging call volume and account creation levels." The Trump administration slashed advertising for federal exchanges by 90 percent and cut the enrollment period in half, ending it on Dec. 15, but Colorado's exchange runs through Jan. 12.
"Colorado media and around the country are drawing comparisons of state-based marketplaces, like ours, and the federally facilitated marketplaces in 39 states," Connect for Health Colorado CEO Kevin Patterson said in an email. "It is helping us get across the longer open enrollment period — through Jan. 12 — that we will be having."
Anyone in Colorado in need of an individual plan should go to the connectforhealthco.com website, where you can sign up through Friday, Jan. 12.