There may be some relief on the horizon for high-country residents suffering from massive health-insurance headaches in the last few years. Two bills currently working their way through the state legislative process could significantly cut rates for people on the individual market.
One, a reinsurance proposal, could cut rates by a third as early as next year for the 3,000 or so people in Eagle County who don’t get insurance through their employer and therefore must buy on the individual market, where there are only two very pricey Obamacare options.
The other bill, a public option provided by the state, will take an additional year to kick in if it passes because of the length of time it will take to get federal waivers. Both bills are either prime sponsored or co-sponsored by local state Sen. Kerry Donovan, of Vail, and state Rep. Dylan Roberts, of Avon.
“Rural Coloradans face the highest health insurance costs in the nation. This bill will create a reinsurance program that will result in lower prices across the individual market,” Donovan, a Democrat, said of the State Innovation Waiver Reinsurance Program (HB-1168).
There are approximately 500,000 Coloradans on the individual market.
“This legislation reflects one of our biggest priorities in the Senate and the most prominent concern I have heard from voters — the need to lower health care costs across the state,” added Donovan, the prime Senate sponsor of the bill that goes before House Appropriations on Friday.
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How reinsurance works
Reinsurance uses state funds and money from hospitals and insurance companies to take the 5 percent or so of high-risk customers off a private insurance company’s books and pay for them separately, lowering the rates for the lower-risk, 95-percent pool of customers.
The reinsurance bill will also require a federal waiver, but it can be applied for and hopefully granted sooner, so that the cost savings will be in place for 2020 if the bill passes.
“So, the plan is to have it in effect for enrollment this year [in December], and the estimates are that for Western Slope counties like Eagle, Pitkin, Routt, anywhere like that, it’s anywhere between a 30- and 40-percent decrease in premium,” Roberts said.
Of course, that just gets things back to where they were a few years ago when rates started going up by double digits on the Western Slope after the ACA went into effect in 2014. In 2019, a family of five pays more than $2,000 a month for an Anthem or Kaiser Obamacare plan and must make less than $117,680 ($48,560 for individuals) to qualify for ACA tax credits.
The 2017 Tax Cuts and Jobs Act stripped out Obamacare’s individual mandate, and non-compliant plans are a little cheaper (with no threat of a tax penalty), but those plans can deny customers with pre-existing conditions. A family of five making more than the ACA limit can still expect to pay $1,500 a month for a non-compliant plan.
Insurance for health insurance companies
Democratic Rep. Julie McCluskie, D-Dillon, and Republican Rep. Janice Rich, R-Grand Junction, are the prime House sponsors of the bill, which is being touted as “insurance for the state’s health insurance companies.” The bill also has bipartisan sponsorship in the Senate, with Donovan joined by Republican Sen. Bob Rankin of Carbondale.
And it has the backing of Democratic Gov. Jared Polis and the CEO of the state’s public health exchange, Kevin Patterson of Connect For Health Colorado, who said, “If enacted, the bill would provide significant relief on health insurance premiums in the individual market — on and off the marketplace — particularly in rural areas.” Urban areas with more competition will see less savings.
On Monday, Roberts saw his public-option bill pass the House on a bipartisan vote of 46-18. It now heads to the Senate for consideration. The bill is meant to increase competition in underserved Colorado counties. There are 14 counties across the state with only one Obamacare plan, and several like Eagle County with just two choices.
The Proposal for Affordable Health Coverage Option (HB-1004) directs Colorado’s Department of Health Care Policy and Financing and the Division of Insurance to craft a public-option using existing state infrastructure and focused on affordability for consumers. The plan has to be presented to the legislature by December, at which point federal waivers will be pursued.
The idea is to drive down costs by creating competition in underserved markets, but it requires a federal innovation waiver.
“We would be innovating some of the dollars that are already coming [to Colorado] through the Affordable Care Act,” Roberts said. “And so we need a waiver to do that, and that’s how we cut down costs … we’re trying to utilize our already existing funding, just in a slightly different way.”
Also on Monday, the House approved HB-1131 by a vote of 40-23, sending it to the Senate. Sponsored by Rep. Sonya Jaquez-Lewis, D-Longmont, the proposal is an effort to provide prescription drug cost transparency.