Eagle County Commissioners: Support act to help remedy Colorado health insurance prices (column)
In October 2015, the phones started ringing. It was open enrollment time, and once again, Eagle County residents began sounding the alarm on the high cost of health plans in the marketplace. The Colorado Division of Insurance had just announced it was closing Colorado HealthOP, a low-cost plan that was popular in high-cost areas such as rural resort communities. Individuals trying to purchase health insurance on the Colorado Health Exchange were having sticker shock.
As county commissioners, we had tackled this problem once before. Soon after implementation of the Affordable Care Act and the creation of geographic rating areas, the Kaiser Family Foundation reported that Colorado’s area 11 (Eagle, Summit, Pitkin and Garfield counties) had the highest health insurance premiums in the nation.
Commissioners from these counties lobbied for a change, and Colorado’s Division of Insurance received permission from the federal government to combine all Western Slope counties (with the exception of Mesa County) into one rating area — Area 9. That was 2014.
According to the Colorado Division of Insurance, the individual market has had three years of annualized premium increases in excess of 20 percent per year statewide. Increases have been even higher in rural and mountain communities. This means the average cumulative premium increases have amounted to approximately 72 percent over the past three years. The system that first raised alarm bells in rural resort communities is not working for anyone.
The Affordable Care Act was signed into law in March 2010. The Act came with several new and unique changes to the American health care system. One popular provision was that insurers could no longer consider health status, including preexisting conditions, to deny coverage or charge higher premiums. The uninsurable were now insured.
As a result of the Affordable Care Act, health care coverage increased in numbers never before seen and almost 600,000 more Coloradans gained health insurance. However, now the risk pool was sicker and more expensive to cover.
According to the Kaiser Family Foundation, certain regulatory programs need to accompany the Affordable Care Act to prevent unintended consequences to the market. The Affordable Care Act started out with these in place: re-insurance to provide a stop loss to insurance companies for the highest risk claims and risk corridors to assure financial aid if insurers ended up with too many sick people and too little cash from premiums to cover their medical bills.
This is exactly what happened. The federal re-insurance program expired and probably wasn’t instituted long enough. Congress defunded the risk corridor program. This led to disruptions, premium volatility and ever-increasing premiums for the individual market.
These cost barriers are causing healthy consumers to drop insurance coverage, thus perpetuating a cycle of a risk pool growing ever sicker and more expensive to cover. As the uninsured numbers grow, so does the cost of uncompensated care that is passed on to all medical consumers. This, in turn, causes everyone’s health insurance to increase — across all groups — and in this fashion, we all pay the price.
The high-cost health premiums are impacting our smallest businesses, some of which are closing, turning away work to stay below the 400 percent of poverty threshold for the subsidy or moving to a cheaper area. The costs are impeding the ability to save for retirement, buy a home and put children through school. Many in Eagle County say the cost is like having another mortgage, only without the return on investment.
Immediate action is needed to stop the bleeding and secure market stabilization.
Fortunately, state lawmakers have a solution before them this session in HB 18-1392, the State Innovation Waiver Reinsurance Program. This bipartisan bill creates a high-cost re-insurance program that buffers insurance companies against risk for unusually expensive claims such as for transplant and cancer care.
In this way, it spreads the risks to avoid destabilization of the market and provides incentives to insurers to offer coverage in currently underserved areas. It will also draw those who have dropped their insurance back into the market. Recently, several Eagle County residents testified in support of this bill.
Re-insurance is admittedly not a comprehensive solution. Cost-containment measures for hospitals and other health-care providers must go hand in hand with this effort, and the legislature is also working on this front. Re-insurance is the necessary first step to stabilize the individual market. Many states have recognized this, and six other states are in various stages of implementation and having success. Colorado’s re-insurance program is expected to bring down premiums at least 20 percent and even more in high cost areas.
We urge state lawmakers to follow their local county commissioners in supporting HB 18-1392 to begin addressing Colorado’s health care crisis. Our communities can’t wait.
Jill Ryan, Kathy Chandler-Henry and Jeanne McQueeney are Eagle County commissioners.