Unaffordable care set for change, but to what?
December 22, 2016
An increase of more than 273 percent in health insurance premiums in just three years and a lack of competitive options for coverage through the state-run exchange leaves the Erickson family of Glenwood Springs with a difficult decision that comes down to numbers.
Pay the $2,600 per month, plus co-pays and deductibles, for their family of four to have health insurance next year through the only carrier now serving Colorado's Western Slope, Anthem Blue Cross/Blue Shield — or pay the income tax penalty mandated under the 2010 Affordable Care Act, also known as Obamacare.
"I'm going to take the penalty," Deb Erickson told the Post Independent, calculating that the fine based on her and husband Mark's income from their property management company would be about one-sixth that amount.
Even with the cost of a short-term catastrophic care policy that they could purchase outside of the exchange, the overall hit would be somewhat less, she said.
"We have a fairly healthy family," Erickson said. "But we still need some type of coverage. We have too much invested in our business and our home for something to happen and risk losing everything."
It's a common dilemma in Colorado's mountain resort market where the limited number of consumers who purchase individual health insurance on the exchange are facing an average 33 percent premium increase for 2017.
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The high costs in some sectors, and what some critics say is an unsustainable federal program in the long term, continues to fuel the move toward its likely repeal and replacement of some sort under the new Republican-controlled Congress when President-elect Donald Trump takes office in January.
"What's labeled as the Affordable Care Act has not been affordable for those of us who live here in western Colorado," 3rd District Congressman Scott Tipton, R-Cortez, said during his recent successful campaign for re-election.
"We were told when the legislation went through that the rate of increase in premiums would go down on average by about $2,500," Tipton said. "It hasn't happened."
Obamacare supporters tout the health care measure's successes in greatly decreasing the uninsured rate on a broader scale, and providing better, more reliable insurance plans all around.
"Progress has been made in slowing the growth of health care costs," said Matthew Fiedler, chief economist with the White House Council of Economic Advisers, during a recent telephone press conference to release a new U.S. Department of Health and Human Services (HHS) report on the impacts of the ACA.
"These marketplace plans have protections and provisions in them that we didn't have before the Affordable Care Act," Fiedler said. "These are quality plans that are actually there when people need them, so that if you are sick you can count on the coverage being there."
Ross Brooks, CEO for Mountain Family Health Centers in Garfield and Eagle counties, said he worries about the 1.3 million Coloradans who rely on Medicaid if that program gets rolled back in any way.
"These are people who live on less than 138 percent of the federal poverty level, and are making less than $15,000 a year," Brooks said.
Mountain Family, based in Glenwood Springs, serves 8,000 Medicaid patients in the area.
"Any move to balance the federal budget on the backs of those with low incomes, that's something we will fight hard against," Brooks said.
Colorado by the numbers
According to the state-run Connect for Health Colorado, about 10 to 15 percent of Coloradans, mostly those who are self-employed or work for small businesses, purchase insurance through the individual exchange.
The vast majority of Colorado residents obtain insurance through employer-sponsored group plans or qualify for low income-based Medicaid, which was greatly expanded under Obamacare, or are on Medicare if they are older than 65.
A total of 152,470 individuals signed up for coverage through the exchange in 2015, according to Connect For Health's annual report for that year.
That number stayed about the same this year, and as of the latest count earlier this week, sign-ups were running 18 percent ahead of one year ago.
Since 2010, Colorado's uninsured rate has dropped from nearly 16 percent to 8.1 percent, according to the HHS report released Dec. 13. Connect for Health now puts that figure at 6.7 percent.
An estimated 419,000 people in Colorado gained individual coverage between 2010 and 2015, while about 2.9 million people were insured through employee group plans.
Statewide, premiums for policies available through the exchange went up an average of 20 percent for 2017, according to Connect for Health.
That compared with an average 4.8 percent increase for employer-sponsored coverage in the state, according to the HHS data.
But the rates people are paying across Colorado vary greatly, with rates typically much cheaper in metropolitan areas, less than $500 on average, as compared with much higher prices in mountain and rural areas.
According to the HHS report, Colorado is also among a handful of states where marketplace consumers cannot select a plan for less than $100 a month. Each of the surrounding states, including Utah, Arizona, New Mexico, Kansas, Nebraska and Wyoming, affords that opportunity for a large percentage of consumers, according to the report.
politics of change
People who have health coverage through their employers, a requirement under Obamacare for every business that has 50 or more employees, are not seeing the same kinds of rate increases as those on the individual market, said Scott Bolitho, owner/broker at Glenwood Insurance Agency.
But the individual marketplace lacks competition, he said, pointing to the number of carriers that have pulled out of the region and the state as a whole.
"Once people do get insurance, they are using it and using it heavily," Bolitho said, quoting an estimated $230 million loss for insurance companies offering individual insurance plans in Colorado.
Anthem BC/BS is now the sole carrier for 14 Western Slope counties, including Garfield, Pitkin and Eagle.
"People here have been and still are faced with some pretty harsh insurance rates," Bolitho said.
The zoned insurance rating system in Colorado that resulted in some of the highest rates in the nation for the mountain resort areas and rural regions, due to typically higher health care costs, has been part of the problem, Bolitho and others say.
"There are some features of Obamacare that are good, and you probably won't be able to replace everything," Bolitho said in reference to such features as not being able to deny coverage based on pre-existing conditions, unlimited lifetime benefits and allowing children to stay on their parents' policies until age 26.
"At the same time, it took away the risk factor for insurance companies," he said. "All insurance is based on risk, but when you take that factor out and charge the same for everyone, it doesn't allow for adjustments and it ends up penalizing the healthy people."
Three years ago, Deb Erickson said her family was paying just under $700 a month for insurance through United Health Care, one of the companies that ultimately pulled out of the region.
After paying off their house this summer, she said they figured they could put that savings toward health insurance. But the more than 36 percent increase was far more than they bargained for.
"I'm just one example, and maybe on the extreme far end," she said. "But we can't keep covering everyone else, and it forces us to make choices."
It's something Congressman Tipton hopes to help fix when he heads back to Washington next month.
He supports the "Better Way" approach being put forth by the Republican leadership and House Speaker Paul Ryan.
"The common ground we can all work off of is that we want affordability and we want accessibility to health care," Tipton said in a post-election interview with the Post Independent.
When it comes to protecting some components of Obamacare, such as the clause regarding pre-existing conditions, "I will vote for that," Tipton said.
"But we have to go to more of a market approach, and making sure people are getting real choices," he said.
However, "Now, we're looking at a cost to continue the program of a trillion dollars more than originally estimated," Tipton said in reference to recent Congressional Budget Office projections that Obamacare would cost $1.8 trillion in its first 10 years.
Supporters counter that the number is closer to $1.2 trillion, admittedly more than the original estimate of around $800 billion. But recent projections also suggest the U.S. is on track to spend $2.6 trillion less on health care in the first five years of Obamacare.
The ACA is now "built into the fabric of American health care," Aviva Aron-Dine, senior counselor to the secretary at HHS, said when the new departmental report was issued last week.
"Barring any sort of measured, phased repeal, it's more like repeal and collapse," she warned.
Steve Reynolds of Glenwood Springs co-chairs the health care committee for the Western Slope public policy group Club 20 and has promoted a single rating area for all of Colorado instead of the geographically zoned system.
"It's not just a western Colorado issue, it's a rural issue all across the country," Reynolds said. "When you have smaller populations and services that are expensive to deliver, do the math, divide it out, and it doesn't work."
A single rating system not just for Colorado but for the entire country might be the way to mitigate the impact on rural areas, Reynolds added.
"Personally, I wish we could not think about a big, broad repeal and replace, and just drill into the problem areas and adjust them," he said.