Series: A look at how Coloradans in the mountain benefit from Obamacare
Part 4: Locals had big increase this year in individual market, but the rates were relatively low in 2014 and 2015
Special to Colorado Mountain News Media
PART 1: Despite — or perhaps because of — Colorado mountain dwellers’ love of hiking, skiing, bicycling and all things physical, health care costs are stubbornly stuck far above average.
PART 2: How did western Colorado reach a point where for some people, health-care costs more than a large mortgage?
PART 3: People in the mountains use MRIs and other imaging services, as well as pathology and lab work, at three times the rate of the rest of Colorado, part of why costs are higher.
PART 4: Health experts in the mountain resorts and metro Denver warn critics to be careful what they wish for — tossing out all or part of the Affordable Care Act can make things a lot worse.
PART 5: Facing much higher costs, many high-country residents wonder whether their hospital bills are justified — or whether the amenities have to be so nice.
PART 6: Innovation, generosity and cooperation are showing some promise for tamping down high-county health-care costs.
Editor’s note: This story is the fourth in a six-part series on health care costs in the Colorado mountains.
Sometimes, Obamacare stories have happy endings, even in the mountain valleys of Colorado.
And they are reminders of the potentially disastrous consequences of attempts to dismantle Obamacare, piecemeal or wholesale.
Last year, Richard Backe of Glenwood Springs testified that health care costs for his family were so crushing that he might have to shut down his construction business and move to Denver, where premiums were about half the price he was paying. Last year, his family’s premiums were $1,540 monthly; for this year, he was looking at $2,100.
But then he discovered that he qualified for a tax credit through Connect for Health Colorado because his family’s income was less than — barely — 400 percent of the federal poverty level.
Now, his monthly premiums are relatively reasonable and he’s staying put. And while he thinks the Affordable Care Act needs improvement, he has vowed to campaign against any politicians who “are a part of dismantling this good law.”
Health experts in the mountain resorts and in metro Denver warn critics to be careful what they wish for — tossing out all or part of the Affordable Care Act can make things a lot worse.
Year after year, health care costs rise about twice as fast as the cost of living. A consensus of studies has suggested that without the ACA, health care costs in the United States would be 19 percent of gross domestic product, instead of the 18 percent it is today.
The ACA has made it possible for 20 million additional Americans to be covered by health insurance. It is a boon to many. While the majority are still covered by employer insurance and haven’t seen big changes in their plans, it has been a godsend to those with pre-existing conditions who previously couldn’t find coverage, and to those at or just above the poverty level who previously couldn’t afford it but now enjoy generous government benefits.
And as many resort-town residents can attest, it’s at least bearable, if not affordable, for those who can stay inside 400 percent of the federal poverty level and thus qualify for a tax credit.
The White House’s Council of Economic Advisers December 2016 report on Obamacare noted that since 2012, Colorado went from 15.9 percent uninsured to less than half that, with 419,000 gaining coverage. Almost 3 million Coloradans are covered via employer plans (includes family members).
Due to the Affordable Care Act:
• 5,900 fewer Coloradans had catastrophic out-of-pocket costs.
• 18,700 fewer needed to take out loans to pay health care bills.
• There was a $140 million reduction in uncompensated care (hospital or doctor bills not paid).
• 2.25 million Coloradans have some kind of pre-existing condition, but can’t be denied coverage.
• 108,000 have a plan on the individual market through Connect for Health Colorado.
• 67,000 of those received the tax credit, lowering their monthly premiums to an average of $318 per month.
• 52,000 could qualify for tax credits but haven’t applied.
• Among Coloradans above 400 percent of poverty, just 3.2 percent are uninsured, down from 14.3 percent in 2013.
• 820,000 Coloradans are enrolled in Medicare. ACA gives them an average of $983 in savings on prescription drugs by eliminating the doughnut hole.
Colorado Insurance Commissioner Marguerite Salazar said Americans “don’t have a firm idea of what is Obamacare and what isn’t.”
They like the part about not denying service to those with pre-existing conditions, so much so that they now feel it should be the natural floor for all plans. Until ACA came along, insurers could deny coverage to the 2.2 million Coloradans who had diabetes, asthma, heart conditions or a number of other pre-existing conditions.
And most people like that children can stay on their parents’ plans until age 26. And those who get the tax credit love that aspect.
But they don’t like the idea of being told they have to have insurance. That protestation “is as American as apple pie,” Salazar said. But the various parts of ACA — or anything that replaces it under the Trump administration — have to stitch together or the whole thing falls apart.
Some women beyond child-bearing years ask why they’re forced to buy a plan that includes maternity benefits. But younger people could just as readily ask why they’re forced to buy a plan that subsidizes the greater health needs of people in their early 50s and early 60s.
Salazar notes that 15.3 percent of Coloradans were without insurance on the eve of Obamacare, and that has dropped to 6.9 percent. Over the long run, that will mean rates will go down as more people get a handle on their health, thanks to insurance.
Amy Downs, vice president at the Colorado Health Institute agrees. There were big increases — about 30 percent — in the individual market this year, but the rates were relatively low in 2014 and 2015.
“The carriers were either intentionally or unintentionally underpricing their plans. Now they have to catch up,” Downs said.
That catch-up can hurt, especially for those who get no financial help to pay for premiums. “But that doesn’t mean the market is broken,” Downs said.
Experts who devote their lives to trying to rein in health care costs say it’s hard to say which lever should be pulled at any given time. “So many things are contributing to the cost conundrum,” said Adele Flores-Brennan, executive director of the Colorado Consumer Health Initiative, a consumer-oriented health advocacy organization.
Health costs comprise one-sixth of the gross domestic product, yet most people here aren’t spending 18 percent of their incomes on health care, at least not directly.
In the mountain resort areas, 22 percent of the population is on Medicare due to their advanced age, and 23 percent qualify for Medicaid due to their low incomes. Those two groups pay very little; Medicaid relies on subsidies, including a new tax on the wealthy; Medicare relies on the FICA tax taken out of paychecks.
There is the large group that gets their health insurance from work. Typically the employer pays about 80 percent, with the employee paying the rest. If the employee needs to cover the whole family, the employer isn’t as generous in its share for the whole family. Still, it typically adds up to a fairly small proportion of the income — if workers don’t count the salary they could be earning if the employer didn’t have to pay most of the premium.
The group seemingly getting the rawest deal are those in the individual market, typically self-employed people — and while they comprise only 8 percent of Colorado’s population, they comprise 20 percent of the population of the mountain resort counties, according to the Colorado Health Institute.
They’re the ones shocked to see a 30 percent rise in premium prices this year, the ones not failing to notice that they’re paying double the premiums of self-employed people in metro Denver.
But more than half of the people in that group qualify for tax credits that are supposed to lower health care costs to 10 percent of their income. It often doesn’t work that way because of the large deductibles that many feel forced to opt for. Nonetheless, for most of those with the tax credits, the costs are not catastrophic.
And there is a small slice of the population of Pitkin, Eagle, Garfield and Summit counties who are self-employed but earn so much money that the high premiums still don’t account for much of a percentage of their total incomes.
That leaves some 6 percent of the area’s population — maybe 10,000 people — bearing the toughest weight.
Backe is just relieved he is no longer in that group.
And while it can be frustrating to be constantly vigilant that he doesn’t make too much money, he is grateful.
“The Affordable Care Act is not at heart of the problem,” he said. “The problem is runaway health care cost and insurance costs.”
His wife had cancer 10 years ago, and though she is doing well now, “we know what a $1 million hospital bill looks like” and what it can do to a family that doesn’t have insurance.
“We were so close to the line. I’m not the only person walking the fine line. You either get the Advanced Premium Tax Credit or you have a hard choice. I know plenty of people who are going without.”
Health care in America is like those crazy-shaped balloons — poke one side and the air moves to another side but still stays within the balloon.
President Donald Trump’s proposal to keep pre-existing conditions but eliminate the mandate could encourage younger people to buy plans, but it also could cause an even greater exit of healthy people from the system, causing prices to rise faster for the slightly sicker population that remains in the system.
His proposal to give states more flexibility will bring back less comprehensive plans, eliminating maternity benefits, and others, and increase premiums for older and sicker people, while improving affordability for younger, less expensive people.
Encouraging health savings accounts as a replacement for the high deductibles in lower-priced plans is a boon to those who can afford to save, but crippling to those who can’t.
Some think undocumented immigrants are getting a better deal than the self-employed middle class because they frequent the low-income health clinics and pay out of pocket on a sliding scale based on income. But Adela Flores-Brennan, executive director of the Colorado Consumer Health Initiative, disagrees.
“Undocumented immigrants are completely left out of ACA, they can’t access Medicaid or CHP and they’re not eligible for tax credits for bringing down the costs,” she said. Despite paying into Social Security and Medicare with dollars they likely won’t recoup, “they don’t have a lot of options for coverage. They have to pay as they go.”
It’s human nature, all of this grumbling, and calling for better care, lower costs and more freedom to buy health care on their terms, Salazar said. But every tweak that helps one group hurts another.
“They like the candy and desserts, but they have to eat the vegetables that are the mandate,” Salazar said. “Otherwise, everyone games the system and buys insurance only when they need it.”