Vail Valley Partnership unveils new plan promising to slash health care costs
EAGLE COUNTY — Ever-increasing costs forced Mike Brumbaugh to stop offering health insurance to his employees for a few years. A new plan announced Wednesday, Nov. 28, by the Vail Valley Partnership may put him back in the game.
The partnership has rolled out the One Valley Health Care Program, a program designed to provide some members with significant savings on their health care costs.
Similar programs are starting to gain popularity in states including Texas, Nevada, Maine, Wyoming, Washington and Kentucky. But this is the first time an organization in Colorado has rolled out a program like this one.
The program includes coverage for preventative care, with 100 percent coverage of all federally-mandated services. It can also cover primary care, access to medical specialists and telemedicine. There’s a prescription drug plan and coverage for “significant and catastrophic events” anywhere they may occur.
The program claims to be able to lower participants’ health care costs by as much as 60 percent compared to standard group health insurance plans.
But this plan isn’t insurance, and it isn’t for everyone. Here’s how it works:
Members pay a monthly fee into one of two plans. Money from fees is pooled by the plan administrators. Administrators have already negotiated prices with local providers including Vail Health. Members are also encouraged to shop around for services they may need.
In the case of, say, an emergency room visit while on vacation, plan administrators will negotiate a price for services.
Partnership CEO Chris Romer acknowledged that members are required to do more work to participate.
But, Brumbaugh said, the extra work is balanced by cost savings.
Brumbaugh, the owner of Venture Sports and a former Vail Valley Partnership Board of Directors Chairman, has paid careful attention over the plan’s roughly 16-month gestation. He said the program could be a good alternative for his business and its roughly 20 full-time employees.
Brumbaugh said Venture Sports had offered employees health insurance for a decade before the federal Affordable Care Act became law. After the law took effect, the cost of basic insurance rose rapidly.
Brumbaugh said his personal insurance plan went from about $500 per year for coverage that paid for major events. That premium quickly went to $500 per month.
“Paying $500 a month for 20 people is $10,000 a month, and that puts me out of business,” Brumbaugh said.
When Brumbaugh stopped offering company insurance to his mostly-young, mostly-fit employees, most of those employees simply went without insurance.
“They’d pay the (federal tax) penalty and roll the dice,” he said.
It’s not for everyone
Brumbaugh’s employees may sit largely in the sweet spot for the One Valley plan. The plan doesn’t automatically cover pre-existing conditions including asthma, diabetes and cancer. Under the Affordable Care Act, those conditions have to be covered.
The One Valley program also isn’t covered by state or federal regulations. That concerns officials at the Colorado Division of Insurance. That state agency has also been kept up to date as the local program has developed.
Division spokesman Vincent Plymel said state regulators have a number of concerns about the program. One of the big ones is that people may sign up for the plan without understanding the differences between it and standard insurance.
The Uber ride-sharing service comes up frequently in conversations about the One Valley plan. Plymel said like Uber, this plan could have some surprises for early participants. A number of Uber users were at first surprised by the service’s “demand pricing,” which charges higher fees for high-use situations.
“You can put a lot of information in front of people, but that doesn’t mean they’ll understand it,” Plymel said.
The positive side
Romer said the Uber comparison is apt, but in a more positive way.
“When Uber came out, all the regulated (transportation) companies said, ‘You can’t do that; it’s not regulated,’” Romer said. “Now Uber’s a huge thing.
“Any innovation disrupts the status quo,” Romer added, calling the One Valley plan “an options multiplier” for controlling health care costs.
But understanding those options is essential.
Plymel suggested that prospective plan members do a lot of homework before signing up.
“You don’t need to read the entire booklet, but look at the things that are important to you — your prescriptions, your pediatric visits.”
Romer acknowledged the need for members to be well informed. While the plan will work for sole proprietors and small businesses, Romer said the plan probably isn’t a good one for those with pre-existing conditions or employers with 50 or more employees.
Is it legal?
There’s also some question whether the One Valley is compliant with Affordable Care Act requirements. Romer said the One Valley partners — the SALA Healthcare Program, Apex Management Group and Sedera Health — claim the plan meets federal requirements for “minimal essential coverage.”
Plymel said state regulators disagree.
Romer said it’s still unclear how popular the One Valley plan will be, or how it will work for participants. But, he added, something needs to be done to help employers and individuals ease the cost of health care.
“We needed something that didn’t require state regulatory modeling,” Romer said. “We needed something that didn’t require legislative fixes … We’ve had years and years worth of meetings. We’ve had years and years of mountain legislators as champions for health care (with no result) … I marvel at their patience … we landed on this model as an answer at this time.”
Vail Daily Business editor Scott Miller can be reached at email@example.com and 970-748-2930.