This week, in our final installment of the Healthcare in the Valley series, we look at the ins and outs of individual health insurance coverage, and how to get involved in the local conversation about maintaining access to quality care.
On a local and national level, the healthcare conversation often focuses on the role of the uninsured. But in Gunnison County approximately 60 percent of residents have commercial insurance through their employers or individual plans, and they’re often in the dark when it comes to the details of their coverage.
According to health insurance agent Gary Shondeck, the biggest mistake the insured make is not reading the certificate of coverage—that big packet of information that arrives in the mail with the insurance card. Shondeck has been helping Gunnison Valley residents navigate the insurance system since the 1980’s, and he says that not understanding what’s covered can lead to some big surprises.
“The key is not necessarily what is covered but what is not covered. Some insurance companies will exclude adventure sports. They don’t cover you if you’re riding a motorcycle or if you’re backcountry skiing or if you’re involved in a race,” Shondeck said.
That can be a problem in a community that celebrates events like the Grand Traverse, where the hardiest among us ski from Crested Butte to Aspen in the middle of the night. To insurance companies based in the Midwest, that’s a risky venture, and holes in their coverage could leave the insured vulnerable.
“You have no idea what they consider to be an adventure sport. Mountain biking is a common activity in Gunnison and Crested Butte, but to somebody in Wisconsin, it might be an adventure sport,” Shondeck said.
Finding the right coverage isn’t just a matter of finding the right premium. It’s about sifting through the options to find the policy that best matches your lifestyle and your budget, and that’s where insurance agents like Shondeck enter the picture.
Navigating the insurance system
“The worst thing I could do is sell you a plan you can’t afford,” Shondeck said.
Rates are a sensitive issue, he continued. Everyone wants a low deductible and a low premium, but that’s not how the system works. Most often, a low premium plan has a high deductible and vice versa. The best coverage, Shondeck said, balances the type of coverage with the cost of the premium, the size of the deductible and, in some cases, a tax-exempt Health Savings Account (HSA) to help cover medical costs.
Shondeck helps clients find that balance and make sure that any claims are handled properly; if he can’t find affordable commercial insurance for someone, he at least points them toward state programs that could help (see sidebar: Alternatives to commercial insurance). The biggest misconception about his job is that most people think it costs more to work with an insurance agent. But while Shondeck does receive a percentage of his clients’ premiums, their premiums are the same with or without an agent.
Many of the challenges Shondeck’s clients face echo nationwide trends: carriers are pulling their products out of specific regions or entire states as it becomes harder to turn a profit—Aetna recently pulled out of Colorado altogether—and insurance premiums have been sky rocketing.
In the Gunnison Valley, Shondeck said, four insurance carriers have established relationships with local healthcare providers: Anthem, Rocky Mountain Health Plans, Cigna and United Healthcare. And while there are trends among all of them, like rising premiums, not all companies’ policies are created equal.
Some insurance companies charge different premiums in neighboring regions; they might, for example, collect higher premiums in Gunnison County than Montrose County. In some cases, regional differences make sense because reimbursement rates to healthcare providers differ between one region, like the Western Slope, and another, like Denver.
“We don’t have as many people [on the Western Slope], but doctors on the Front Range have a higher volume and can absorb lower reimbursements,” Shondeck said.
But sometimes it gets tricky for the healthcare consumer because insurance companies don’t use the same models for setting premiums. Some companies treat Gunnison and Montrose counties the same, and it’s up to the consumer—or the insurance agent—to figure out which carriers are charging them more simply for living in a different county.
Add factors like that to ever-increasing insurance premiums, and it’s not only difficult to figure out which plan to pick but also how long to stick with it. One of the biggest points of confusion Shondeck observes in his clients is a misunderstanding over why their premiums rise when they haven’t had any major claims.
“Insurance companies share the risk with everyone; your rate is the same whether you’re 33 and in perfect health or 33 years old and just had the worst claim ever,” Shondeck said.
To compensate for rising premiums, Shondeck performs annual reviews for his clients, reevaluating their insurance and, if necessary, switching them to different deductibles or carriers. It’s a role he believes will become even more critical if healthcare reform goes through: rates will increase as mandates go into effect, and people will need even more help navigating the system.
“We have a much louder voice than an individual out there,” he said.
The evolving role of coverage
It’s not hard to see how people get frustrated and opt to go without insurance. In the Gunnison Valley, we have our own fair share of young, healthy people who think they can afford to go without health insurance and don’t prioritize it.
“We live in a community where somebody would rather buy a $3,000 mountain bike than health insurance,” said Dr. Bob Brickman, chairman of the Gunnison Valley Health board of trustees.
When people do get hurt, the cost of the premium and an out-of-pocket deductible—even if it is $10,000—is a lot more manageable to pay than the cost of a hospital stay that can quickly reach six figures. At the end of the day, that’s the reason to have insurance: to cover the catastrophic expenses.
It’s a shift in mindset from one where health insurance covers all care, including health and wellness. But as Dr. Eric Thorson of the Town Clinic of Crested Butte pointed out, people view health insurance differently from other types of insurance.
“You don’t use your car insurance to pay for your gas at the pump or an oil change. The same is true for property insurance. You use that when the house burns down, not when you need to replace the gutter,” Dr. Thorson said.
When individuals visit the clinic for a $40 flu vaccine or a $100 office visit and then have it billed to their insurance, Town Clinic office staff have to take several steps: generate the claim, submit it to the insurance company, wait for the claim to be processed, and oftentimes, find out that the patient has not reached his or her deductible. Staff must then seek payment directly from the patient.
“By using insurance for every healthcare expense, we increase the administrative time for both medical clinics and insurance companies. That translates into higher cost of care and higher premiums,” Dr. Thorson said. “With a $10,000 deductible, you would have to see me about 60 to 70 times a year to reach it, but a single hospitalization could quickly exceed that amount.”
By paying some costs—like the flu vaccine or office visit—without going through insurance, and reserving deductibles for high dollar items like surgery, Thorson believes the cost of care and premiums could possibly decrease. He could provide preventive care at a lower cost if his clinic didn’t have to account for navigating insurance reimbursements. It’s also helpful when patients keep the clinic up to date on policy changes.
“Almost every week, there is a claim we hear about where the patient wasn’t an eligible member, so it’s completely denied,” said Marsha Thorson, office manager at the Town Clinic. “Then we’re tracking down the patient, asking is this true, and do you have new insurance you didn’t tell us about?”
The process has grown so time consuming and cost prohibitive that some primary care providers are forgoing insurance altogether and pursuing a direct relationship with patients by providing care for a set fee. They’re called concierge doctors, and according to healthcare consultant Rick Huntington, they’ve become much more prevalent in the last five years.
“It’s a cash deal, no insurance,” Huntington said. “It really cuts down on a physician’s overhead and expenses, but the person has to have cash to pay the fee.”
According to an April 2011 article in The New York Times, patients pay, on average, between $1,500 and $25,000 per year to receive concierge care from their doctors. It’s a more personalized form of care that has received a lot media attention for serving the wealthy. One doctor featured in the article charges clients as much as $70,000 per year.
But some primary care providers are also developing what Dr. Thorson calls a “concierge variant” by charging a yearly membership fee for healthcare—some plans are as low as $500 a year, and include most services provided in the clinic setting.
These doctors, he said, are simply looking for a more sustainable model to deliver care. And indeed, one New Jersey doctor’s rationale for providing this type of wellness plan echoed Dr. Brickman’s insights in Part 3 about paying doctors to keep people healthy. The doctors web site reads, “Dr. Horvitz set up Wellness Plans that do not reward him for performing extra procedures, tests and office visits.”
His approach is just one example of how the current healthcare system is motivating physicians to consider alternative ways to provide care, testing new models even as the national debate over healthcare continues to swirl. It is a good reminder, in fact, that oftentimes the most innovative healthcare initiatives take place at the local level.
Finding solutions on the local level
“Healthcare is delivered locally,” Huntington said. By contrast, on a national level healthcare is often a political hot potato. After Hillary Care failed during the 1990s, it was politically dangerous to talk about healthcare and even now, the Affordable Care Act is mired in political debate.
“So most of the great initiatives—and not so great initiatives—happen on the local level,” he continued.
And if there’s one thing that’s clear in the Gunnison Valley, it’s that leaders are taking strides to keep healthcare accessible and affordable—and they also want to involve the community in that conversation.
“We have started talking about hosting a community meeting where patients and members of the community come together and tell us what they want from our clinic and the care they need, and to start having community-based conversations about health care,” Dr. Thorson said.
“Healthcare debates have been going on at the federal level for a really long time, and waiting on our politicians and congress to make changes also takes a long time,” Marsha Thorson added. “…I think we’re in trouble if we wait for our politicians to come to agreement. Changes can be made locally, whether at the state level or the county level, even the city level—I think that’s something every community needs to think about.”
The Thorsons plan to hold the meeting sometime this summer, but they’re first reaching out to patients for input on topics and timing. Community members interested in the meeting can contact them with ideas at firstname.lastname@example.org.
And according to Michelle Campbell, chief marketing and business development officer at GVH, plans are also in the works to create community advisory groups at both ends of the valley this fall.
“We’d keep them informed, but most of all, we would ask for their input to make sure we’re developing programs and providing services that meet the needs of the community,” Campbell said.
One thing is clear: now is the time to get involved. As Huntington said, “There’s a lot of uniqueness to every community and the way they finance and deliver healthcare. The individuals are unique, probably none more unique than Crested Butte.”