Slowdown seen in health insurance premium increases
Some local agents, however, say it will take more than competition to send prices down.
“Next year, increases are nowhere near where they were last year,” says Hollie Gorman, an insurance agent with Atason Insurance Services of Avon. “But I still think it’s unaffordable. New companies starting up are calling for quotes and they say they can’t afford it.”
Gorman, who only works with Humana health insurance, says quotes for 2003 are coming in with a 20 to 30 percent increase.
“That is a break compared to the 2002 increases of up to 60 percent,” she says.
For example, a young man’s premium with Humana will jump next year from $193 to $247 a month, Gorman says.
One of the reasons for the increase slowdown is the arrival in the past year of other five insurance carriers, which are now actively marketing small-group health insurance PPOs (preferred provider organization) plans in Eagle, Pitkin and Garfield county, says Marci Tribelhorn, a local health insurance agent.
At least half of the people in Eagle County are insured in small groups of one to 50 people.
Those carriers are United Healthcare, Pacific Life, Anthem BCBS, PacifiCare and Rocky Mountain Health Plans.
Tribelhorn, who is licensed to sell all six carriers in the valley, says Humana’s quotes for next year’s premiums have gone down, from 70 percent increases in 2002 to 17 percent increases for 2003.
“It’s still high, but that’s what they said they would do,” she adds.
In late 2001, Humana and Sloans Lake Managed Care PPO Network mutually
agreed to end their contract in Eagle, Garfield and Pitkin counties. That
allowed Humana to begin direct contract with hospitals, physician groups and individual physicians.
“This direct contracting has led to more stable and predictable agreements with hospitals and physicians, while also reducing
administrative cost,” says mark Mathis, spokesman for Humana.
As a health benefits company, Humana has no control over many of the
factors contributing to today’s rapidly rising health care costs, Mathis says.
“We cannot control rising prescription drug costs, expensive new medical
technologies, or the fact that our population is aging,” he adds. “We do, however, have some control over our agreements with hospitals and physicians, so that is where we focused our efforts.”
United Healthcare, however, is experiencing greater increases than Humana, Gorman says.
“United Healthcare came in so much cheaper than Humana for 2002, but their rate increases are considerable for next year,” Gorman says.
Kelly Knigge of United Healthcare says new rates will increase, but she couldn’t specify in what percent.
“The increases tend to be following medical expense increases,” she adds.” Overall, the premiums aren’t increasing nearly as much as they were last year.”
Health insurance panic
Options for healthcare coverage for small businesses in Eagle, Pitkin and Garfield county almost became extinct in March 2001, when Humana, the only health insurance company to offer plans to small businesses in those counties at the time asked the Colorado Division of Insurance to discontinue offering products.
Soon after that, the division allowed Humana to stop selling new PPO policies in 21 counties, excluding Eagle, Pitkin and Garfield counties. The provider, however, had to renew the existing policies in all 24 counties.
In September 2001, Jamie Scholl, president of the Colorado State Association of Health Underwriters, identified rural areas in Colorado as the most problematic in regards to health insurance. At that time, Scholl said, of the 70 health carriers in the state, only four covered rural areas.
“We identified outdated reimbursement methods as the specific problem that was preventing the major insurance plans in Colorado from contracting with doctor groups in the High Country,” Scholl says.
Last year, in the midst of the crisis, Scholl initiated discussions between Colorado Mountain Medical and two major carriers. A plan was implemented to transition Colorado Mountain Medical to the relative values reimbursement based system. This system, used mostly by all major insurance carriers, was key to attracting the new carriers because it’s an accurate system of breaking down cost structures by procedure, Scholl says.
“More choice of insurance carriers means lower rates and a better service,” he adds. “You can expect about a 10 percent difference between carriers.”
Research before buying
Although there’s more choice of carriers, one still has to be very careful when choosing a policy, Tribelhorn says.
“All have their little quirks,” she adds.
Anthem BCBS, for example, has a pitfall for residents in the mountain. It only covers $5,000 of the $14,000 cost for an emergency flight to Denver.
Gorman advises people to be careful with individual policies because there are a lot of unlicensed health insurance carriers.
Unless you know what you’re doing, getting health insurance through the Internet also can be a great mistake, she adds.
“There’s no accountability, no one you can go to with questions,” Gorman says.
In spite of the improvement in premiums prices for next year and the choice of carriers, Gorman says something drastic still needs to happen.
“And it won’t happen overnight,” Gorman says.
Prices in Colorado are higher than in other states because of the inflexibility in the current state health legislation, says Rich Powers, director of contracting for ChoiceCare Network in Colorado, Humana’s newest program. Colorado is a “community rated state,” so everybody gets basically the same rates.
“Things are much better,” Tribelhorn says, “but we still need to work from the legislative level.”
Veronica Whitney can be reached at 949-0555, ext. 454, or at firstname.lastname@example.org.