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Colorado’s public option health insurance could be critical if Trump, SCOTUS kill ACA
In an article that first appeared in the Vail Daily, I recently wrote about the proposed Colorado public option health insurance law that would compel private insurance companies doing business elsewhere in the state to provide a state-monitored plan in one of the 22 counties in Colorado, including Eagle, that have just one Affordable Care Act insurance carrier.
That one ACA-compliant carrier in Eagle County is Anthem after Kaiser pulled out at the end of 2019. It costs a family of four about $1,600 a month for that Anthem plan, with a $6,500 deductible before benefits, and that’s before any ACA tax credits.
I know that because that’s how much my family is currently paying on the individual market, and we make too much to qualify for the ACA credits. If you make less than the income limit, however, you’ll find it’s very difficult to live in a place like Eagle County with such sky-high housing, health care and overall costs (groceries, gas, child care, etc.).
In 2019, my family, which was covered under Vail Resorts/UMR for 10 years before both my wife and I became self-employed at the end of 2018, went with a non-ACA-compliant Cigna plan called Freedom Life for our then family of five.
That Cigna plan cost a little less at $1,400 a month in 2019 but denied one of my sons for a benign preexisting condition that required no treatment. He had to be on a separate ACA-compliant Kaiser plan last year for $300 a month, for a total of $1,700 a month for five us.
That Cigna plan also didn’t cover preventive care like annual checkups and sports physicals (I was charged $500 for those services for one of my sons) or vaccines (we paid $40 a pop for flu shots). In addition, we were all allowed just one procedure on that Cigna plan.
I had a basal cell carcinoma on my nose last year – a fairly common thing for people living at high altitude in the intense Colorado sun — so Cigna covered the $800 diagnostic procedure and then stuck me with a $2,500 bill for the actual removal.
Now, under Anthem, I don’t think any of that would be covered until I hit that $6,500 deductible, but wellness exams are covered, and so are flu shots, and my son who was rejected by Cigna last year for a mild case of scoliosis with no treatment prescribed is now on our Anthem plan. Our oldest son is now able to get his own coverage in Montana and makes well under the ACA earnings limit for tax credits, so he’s getting affordable coverage, but could remain on our plan under ACA rules if need be.
Anthem just sent me a pretty reassuring email stating COVID-19 testing for the rest of us is covered (if necessary and if and when there are any tests to be had), along with treatment, which is no small thing given we have now seen four presumptive positive tests for coronavirus in Eagle County.
The Anthem plan is still unaffordable, even for an upper middle class family like ours in a high cost-of-living mountain-resort area (nearly $20,000 a year, plus very high deductibles), but I can unequivocally say it’s better than going back to the bad old days of being denied for preexisting conditions, your kids getting kicked off your plan at 18 and no coverage for the most basic wellness exams and care. Those preventive measures should save the system money.
Now Colorado lawmakers are taking it upon themselves to champion preventive health care, as detailed by Jason Salzman on Colorado Pols.
The big question is whether the state’s public option, which wouldn’t kick in until 2022, will make things better and either help drive down the cost of plans like Anthem’s or offer a cheaper alternative? And will its cost controls for health care providers be effective in driving down prices for health care and prescription drugs, as its sponsors promise?
Eagle County business and health care leaders are working on a co-op plan similar to the Peak Health Alliance in Summit County, and the state lawmakers driving the public option plan – Avon’s Dylan Roberts and Vail’s Kerry Donovan – say such a co-op could serve as the public option alternative under their proposed law, meaning no state-monitored plan necessary here.
But I’ve heard our family would actually pay more than the Anthem plan if we were able to get the Peak Health Alliance coverage here, so unless our version is significantly cheaper, what’s the point? Competition for competition’s sake?
The real problem is the ongoing uncertainty at the federal level. The Trump administration, which for years promised to repeal and replace the ACA with something much better, really only took vote after vote to repeal without ever offering a plan that would replace and improve upon the ACA. Now they’re trying one last time to scrap the law in the U.S. Supreme Court.
That would spread chaos in the health care industry, with hundreds of thousands of Coloradans now covered under our state’s Medicaid expansion and on private plans like mine on the individual market cast into the maelstrom of uncertainty that would ensue in 2021 and beyond. That’s why Colorado officials have signed onto lawsuits to protect the best parts of the ACA.
The majority of Americans now favor the law and want its most popular aspects to remain in place and for the federal government to work on fixing the broken parts of the law. That’s why Joe Biden has pulled ahead of Bernie Sanders in the Democratic race to take on President Donald Trump, because Biden wants to fix the ACA while Sanders wants to start over with a government-run replacement. And Trump just wants to blow everything up, with no viable replacement, while lying and telling everyone he’ll protect coverage for preexisting conditions.
Trump’s only apparent motivation is to undo President Barack Obama’s signature policy accomplishment and deliver on a promise to his loyal base of Obamacare-haters. Meanwhile, the majority of Americans are suffering in a badly broken health care and health insurance system.
Some more reporting that didn’t make it into my Vail Daily story on the public option: I asked one of the sponsors what happens to their plan if the Supreme Court next year blows up the ACA. Here’s what state rep. Chris Kennedy. D-Lakewood had to say:
“There’s a few things that we’ve tried to protect for in Colorado and there are a few things where the federal government would be completely hanging us out to dry if that happened. So, in terms of the private insurance market, we have already established state law to reinforce all of the essential health benefits, as well as protections for people with preexisting conditions. So, on the private insurance market, we’ve basically created the same kinds of protections the ACA offered to ensure that people are covered. The biggest problems are that all of the tax credits go away so that people would be unable to afford their insurance on that market and the Medicaid expansion would go away so all the people that are currently benefiting from that would be completely hung out to dry. That said, I think it’s fair to say that the public option would be more important than ever in that world because it is offering a better competitor with the other health insurance plans that will be operating in that space.”
Now here’s a re-post of a version of the public option article that first appeared in the Vail Daily:
Rep. Dylan Roberts, D-Avon, Sen. Kerry Donovan, D-Vail, and Rep. Chris Kennedy, D-Lakewood, rolled out their long-awaited Colorado Affordable Health Care Option bill on Thursday to compel health insurance competition, set hospital and drug pricing and hopefully drive down prices in underserved Eagle County and the rest of rural Colorado.
House Bill 1349 would compel private insurance companies doing business in other parts of the state to offer a public option plan in the 22 out of 64 Colorado counties that have just one insurance provider offering plans on the individual market (for people who don’t get their health insurance through their employer). The state will not run the plan but will oversee it.
Eagle County is one of those underserved areas, with just Anthem offering Affordable Care Act-compliant plans on the individual market. A family of four in Eagle County will pay around $1,600 a month for health insurance (before any ACA tax credits if they’re eligible).
Roberts, who represents Eagle and Routt counties in the legislature, said Thursday that the public option will bring down individual market prices by up to 20% in Eagle County when it’s available in 2022.
Asked how the state insurance commissioner and an advisory board set up under the bill will decide which insurance providers have to provide a public option, Roberts said the state will lean toward companies that have some history of selling insurance products in a county.
He gave as an example his employer, the district attorney’s office, which offers insurance to its employees through a small-group plan from Cigna. Previous proposals were aimed at compelling more insurance providers to step into underserved markets.
“[Cigna] may be well more situated to come into a county like Eagle than a plan that doesn’t sell any type of insurance in Eagle County. So those are the unique factors that the commissioner and the board will look at to determine which insurance company’s best to move in,” Roberts said. “And it’s a pare-back of what we came out with in the proposal in trying to move a bunch of insurance companies into new counties. We want to pick the one that is the most reasonable to do so.”
Roberts added that a county like Summit, which has the recently created Peak Health Alliance co-op, would not necessarily see a public option plan. Led by the Vail Valley Partnership and Vail Health, efforts are underway to offer a Peak-inspired plan in Eagle County called the Mountain Healthcare Coalition.
“The commissioner can consider that as competition and not have to move a Colorado option company into that county because we want to recognize the great work that some of those collaboratives and co-ops are doing,” Roberts said.
The Vail Valley Partnership’s Chris Romer called those efforts a slog but added they’re making progress. Having not had time to fully dig into the new bill or discuss it with the valley-wide chamber’s various committees and board members, Romer added the VVP does not yet have an official position on the newly unveiled legislation.
Romer wondered how the level of reimbursement for hospitals was set at 155% of Medicare rates for patients on the public option, questioning one average across a state with a variety of regions from metropolitan to rural to resort. And he wants more information on how the bill addresses all health care costs and not just hospital costs, which make up 30% of spending.
“We have long advocated for a market-driven approach, based on incentives to the providers to reach target costs,” Romer said. “This would be a blend of the ‘total cost of care’ model in Oregon and the Colorado option as proposed. I worry about the unintended consequences of mandated pricing and participation and the negative impact this could have on business as mandates are often fraught with unintended consequences.”
Romer promised to dig into the bill deeper, ask questions and provide more feedback.
“We support the concept of the Colorado option, yet we have concerns about government mandates to business, and we recognize the impact of high health care and insurance costs to the community,” Romer said
Vail Health officials declined a request to comment on the bill but in the past have pointed to numerous initiatives they’ve undertaken recently to bring down the high costs of health care in Eagle County.
Donovan said the time to study the public option – after first passing enabling legislation last legislative session – is past.
“The
health care industry isn’t working for Coloradans. Everywhere I go I hear
people struggling with not being able to access or afford the care they need,” Donovan
said. “The Colorado Affordable Health Care Option is a unique, balanced
solution that works to address the high cost of health care by asking big
hospitals to be part of the solution to increase choice and lower costs. I came
to Denver with the promise to put my constituents first and that is what I am
doing with this bill.”
The bill’s proponents point to research showing that one-fifth of Coloradans do not seek care because of concerns about
the costs. The public option is expected to reduce premiums by 7 to 20 percent,
depending on the region, with rural areas on the Western Slope seeing some of
the biggest savings. Backers also cited “the state’s near highest-in-the nation
profit margins at the largest hospitals.”
The Colorado Hospital Association opposes the public option proposal.
David O. Williams
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