Division of Insurance study conclusions questioned
Western Slope communities will continue to pay more for health insurance, care
August 6, 2016
Craig — Changing the way Colorado determines insurance rates will not reduce health insurance costs, but reducing the cost of health care would, according to a study released last week by the Colorado Division of Insurance.
State legislators — who were responsible for passing House Bill 16-1336, which required the division to conduct the study — are not happy with the conclusions.
"We asked a basic question — what would premiums be if we had one statewide risk region," said State Rep. Bob Rankin, R-Carbondale. "One table shows reductions of 20 to 25 percent in our current group and lesser reductions for most other groups across the state."
Originally, Colorado was divided into 11 risk areas, with rural and mountain communities paying significantly more — between 9 and 24 percent — than Front Range communities. In 2015, the number of geographic areas was reduced to nine, and as a result, those paying higher insurance premiums saw a small reduction in rates.
"The study shows that having one rating region would significantly lower premiums," said State Rep. Diane Mitsch Bush, D-Steamboat Springs. "They argue that these savings would be offset by companies leaving the market giving consumers less choice. I want to see the data that show that."
When future scenarios — such as a reduction in the number of insurance companies providing premiums or changes in community health — are included as factors in the study, it is less clear if consumers would benefit.
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"My concern is that moving to a single geographic rating area could end up harming the very citizens it is trying to help," Colorado Insurance Commissioner Marguerite Salazar said in a news release.
The division believes that, rather than adjust the rating regions, consumers would benefit from reduction to health care costs, the underlying reason for high insurance rates.
"Disparities in insurance costs is nothing new," said Vincent Plymell, communications manager for Colorado Division of Insurance. "What's new is that it's been highlighted by the Affordable Care Act. Transparency is new, but the difference in costs is not."
Many complexities determine why health care costs are higher in mountain regions, making insurance rates higher, including market dynamics, fewer choices in providers, availability of insurance and health care providers and the relative health and practice trends in the geographic area.
"While not recommending that we move to establish a single geographic rating area factor, I am recommending that we focus our energy on ways to control the underlying health care service costs in order to bring relief to the increasing pressure consumers feel from rising health insurance rates," Salazar said.
The next step for the division is to form a stakeholder group by the end of the year. The group will develop a set of recommendations for lowering health care costs. The proposal is slated to be completed by year's end.
While stakeholders deliberate, regional politicians and community action groups will continue to try to tackle the inequities on their own.
"This is perhaps the biggest issue of our area, as it impacts retired folks, economic growth and small businesses. I have heard from people who pay more for health insurance than for rent," Rankin said. "Where do we go from here? A group of state legislators is listening to our county commissioners, and we are going to pull together to try to figure out where we are and what to do next. We are not happy with the recommendations of the study."
Another group, ColoradoCareYES, believes there is a simple solution: passing Amendment 69, or ColoradoCare, on November's ballot.
The amendment proposes creation of a resident-owned, non-governmental health care finance system.
Dave Beckwith, a member of the ColoradoCareYES steering committee said, "Colorado Care does not impact the providers. They continue to be independent businesses. They will continue to compete against each other for patient business. It replaces the payment system — in other words, insurance companies — and in so doing, saves people money."
However, some Northwest Colorado health providers disagree with the proposed amendment.
Lisa Brown, chief executive officer for Northwest Colorado Health, is concerned about Amendment 69.
"The premiums are very high," she said in June. "Even with very high premiums, people have high deductibles."
Beckwith addressed concerns about high health costs in rural areas.
"We are well aware that people in rural mountain areas pay higher rates now,” he said. “That's one of the advantages of ColoradoCare. It would ensure all Coloradans pay the same rate, so if Colorado votes 'yes' on this system, it's equitable for everyone.”
No matter the outcome of November’s ballot measure, one thing is certain: People in rural and mountain communities won't find relief from either health insurance or health care costs anytime soon, according to health care professionals.
This is going to take a lot of work and effort to address, and it's not something that will be fixed overnight," Plymell said.