A geographic heath care rating map favored by state officials has received federal approval as of May 15, after a mere three-day comment period. Courtesy image.

A geographic heath care rating map favored by state officials has received federal approval as of May 15, after a mere three-day comment period.
Courtesy image.

By Caitlin Switzer-The Montrose Mirror

REGIONAL—(May 20, 2014)  For some of Colorado’s poorest rural counties, belts have gotten just a little tighter. Threats of a lawsuit by officials in four of the state’s resort counties—Garfield, Summit, Eagle, and Pitkin, which now pay the highest health insurance premiums in the nation–have initiated a change to Colorado’s geographic rating areas that may raise costs for residents of Montrose and other rural, Western Slope counties.  On Thursday, May 15, the U.S. Department of Health & Human Services (HHS) approved a request from the Colorado Division of Insurance (DOI) to shift from 11 geographic rating areas for health insurance, to nine areas for 2015.  The (DOI) made the request on May 9.

There’s no question the mountain “resort” communities have been hard hit when it comes to health care costs. A May 7 statement from Colorado’s 2nd District Congressman Jared Polis, whose constituency includes Summit and Eagle counties, notes that,  “The high premiums that residents of mountain communities have faced – the highest in the nation according to a Kaiser Family Foundation Study – run counter to the spirit of the Affordable Care Act, threaten to deprive individuals of badly needed medical care, and unfairly penalize families for choosing to make their home in our state’s beautiful resort region.”

National Public Radio (NPR) noted two weeks ago that “The current premium for a 40-year-old nonsmoker in the resort counties is $483 a month. (Colorado Insurance Commissioner Marguerite) Salazar says her best guess is that rates would drop four- eight percent in those counties, bringing the premium down to between $444 and $464 a month.  Rates would go up in the non-resort counties. Salazar says prices could rise four-six percent, which would drive the cost of a comparable plan up from $349 a month to about $366.”

On May 9, the Colorado Division of Insurance (DOI) issued a news release announcing its intent to ask the federal government for approval to change Colorado’s geographic rating areas for health insurance for 2015. Colorado formerly had 11 geographic ratings for health insurance; that number has been reduced to nine. Montrose and surrounding counties are presently included in the West region, which is made of 22 of the state’s rural, Western Slope counties. According to the DOI news release, Geographic rating areas are geographical units made up of metropolitan statistical areas (MSAs), counties or three-digit zip codes, which are used by insurance carriers to price premiums.

The DOI has now combined four rural areas into two larger rating areas, while retaining the seven urban (or metropolitan statistical areas, or MSAs).

“These larger rating areas spread the risk and costs of health care over a larger population,” said Commissioner of Insurance, Marguerite Salazar.  “This is the most equitable way of working towards stable premiums in all regions in the state.  The Division thanks the HHS for their prompt attention to this request to help the people of Colorado.”

Because of this change, the DOI has extended its deadline for insurance carriers to provide plans and rates for 2015, from May 15 to June 6, providing time for insurance carriers to adjust to the new areas.

So far, little outcry has yet been heard from the 22 rural counties whose costs will go up, largely because fewer residents in the region are aware of the change.  Those who are aware of the proposed shift are crying foul, however.

“Montrose county cannot afford for our health insurance costs to go up…amongst a 9.8 percent unemployment. in four  families on Medicare….combined with a sales tax increase and a ballot measure coming up for schools. It will hurt small business that is already struggling,” Montrose resident and business owner Terri Leben said. “Without a thriving business community, you will have a ghost town.

“Montrose needs to attract new business. Who wants to move a business to a town with such adverse tax challenges?”

The request to change the geographic ratings came just days after a meeting of the state’s Health Care Cost Study Group. Only three days were allowed for comment prior to filing the request to the Federal government May 9. The Health Care Cost Study Group was convened after Governor John Hickenlooper asked Salazar to study variations in the cost of health care and health insurance statewide.

“Variations in health insurance premiums across regions arise due to variations in the cost of healthcare across regions,” said Commissioner Salazar on May 2. “These variations are not new, but the transparency brought by the Affordable Care Act is new.”

In addition to reviewing what drives health costs in each region, Miller & Newberg actuaries analyzed five options for the rating areas, including the current breakdown of 11 areas.  The chosen option combine the Western Slope regions of West and Resort into one region, and the Eastern Plains regions Southeast and Northeast into another region.

Kaiser Health News, a service of Kaiser Permanent, notes that “The new plan would group all the western Colorado counties together — except for Mesa County, home to the City of Grand Junction. It would also group together all the counties on the Eastern Plains and in rural parts of southern Colorado.”

“Combining those four counties into two larger groups spreads the cost risks more broadly,” said Commissioner Salazar. “We believe this option would lead to the fairest distribution of costs across these regions.”

Salazar’s stance is a shift from December, when she argued that it wouldn’t be fair for some of the state’s poorest counties to subsidize its richest by lumping them together in the same risk pool, according to Eric Whitney of National Public Radio.

In other news, health care giant Kaiser has announced plans to expand service to Colorado’s mountain communities, specifically those located along the I-70 corridor, by 2016.