The Crested Butte News Serving the Gunnison Valley since 1999
Subsidies keeping pace with the increases
By Alissa Johnson
Health insurance rates are on the rise across Colorado, and particularly on the Western Slope. As the enrollment period approaches the deadline for a January 1 coverage date, insurance agents are busy helping individuals and families pick insurance plans. Those who qualify for subsidies aren’t seeing much change; those who don’t are seeing dramatic increases in rates.
According to a November 17 article in The Durango Herald, health insurance rates are up 26 percent on the individual market on the rural Western Slope and the average increase across the state is about 7 percent.
According to insurance agent Gary Shondeck, people on subsidized plans aren’t seeing a major change in the portion they pay for premiums because subsidies have risen accordingly. In general, they’re paying between $5 and $40 more per month depending on age and the type of plan.
What Shondeck is seeing is a migration between the two major plans offered in the region: Rocky Mountain Health and Anthem. Last year, Rocky Mountain Health offered lower premiums than Anthem, so more people signed up for its plans. That led to more claims for Rocky Mountain Health, and as a result higher premiums this year to cover costs.
“This year, Anthem is the cheaper plan in town so we’re seeing a large migration of people going to Anthem,” Shondeck said.
A second factor at play is the cancellation of what are called “grandmothered” plans.
“These are plans written from March 23, 2010 to December 31, 2013 and those plans weren’t ACA [Affordable Care Act] compliant,” Shondeck explained. That means they had benefit limitations—for example, they may have covered only generic prescription drugs, placed limits on drug and alcohol treatment, or had deductibles and out of pocket limits as high as $10,000 to $15,000, respectively.
Those benefit limitations are not allowed under the ACA. In Colorado, 190,000 grandmothered plans were canceled, and those individuals may be experiencing sticker shock because they can’t shop for comparable plans.
Shondeck also said 83,000 people in Colorado lost their plans because the government shut down Colorado HealthOP cooperative when it was determined to be financially insolvent. That hasn’t had a large impact locally.
“We had 10 or 15 people insured with them, so it’s a minimal number for us,” Shondeck said.
The people hardest hit by rate increases are those who don’t qualify for subsidies. As people feel the pinch, they are left with three choices: make more money to cover the cost of insurance, make less money and qualify for subsidies, or go without and pay a penalty for not having insurance.
“Those are basically the three choices,” Shondeck said.
Insurance agent Jon Kilpatrick says it’s important to remember that rising insurance premiums are not new. “Health insurance premiums have always gone up. It’s not a new trend,” he said.
Kilpatrick believes that a lot of frustration with general healthcare—rising premiums and higher health insurance costs associated with living in a rural community—get assigned to the Affordable Care Act. Yet he sees signs of improvement and expects that to continue.
The website has gotten easier to use, particularly for Connect for Health in Colorado. The use of agents is now encouraged, making the process easier to navigate, and the penalties for not having healthcare are going up. The latter, he says, will bring more younger, healthier people into the system and that influx of money will help balance things out.
In 2014, for example, the penalty for not having health insurance was $95 per adult (up to $285 per household) or 1 percent of the yearly household income. In 2015, that rose to $325 per adult (up to $975 per household) or 2 percent of the annual household income.
In 2016, the penalty will rise again to $695 per adult ($2,085 per household) or 2.5 percent of the yearly household income. “That will push more people into the system,” Kilpatrick said.
Kilpatrick sees two major hindrances to getting people to purchase healthcare under the ACA. First, the process requires multiple stages—people can’t log on and immediately see what their rates would be if they qualify for subsidies. As a result, they see the full-price plans and get turned off by the expense.
Kilpatrick also sees reluctance to apply for Medicaid; it’s only after an individual is denied Medicaid that he or she qualifies for a subsidy.
“That is a social stigma,” Kilpatrick said.
Yet despite the hesitation, Kilpatrick says going through the process is worth the time it takes because the subsidies are significant.
“We have some good plans,” he said.
The trick is to start now rather than waiting for the deadline of December 15 for January coverage. Kilpatrick says it can be a four to five stage process, and it’s important to pick the right plan. A person’s lifestyle could require a specific type of plan.
“If you travel and use healthcare when you travel, you’ll want a multi-state plan,” Kilpatrick said. He also sees small business plans that go underutilized. “That’s where the agent comes in, to help you pick the right plan.”
People seem to be getting that message. At Shondeck’s office, he’s seeing people six days a week. “The biggest thing we’re dealing with is the sheer volume,” he said. “Everyone wants to know what rates will be like. It’s a very busy time and it’s a very complicated process. It’s not just turning on the computer and picking a plan. You have to know how to get credits and how to work through the
program.”
