Guest commentary: Health care rate hikes are untenable
Beyond the importance of affordable housing in our community, the second most pressing issue is the ongoing and astronomical rate increases associated with health insurance premiums. On Monday, the Colorado Division of Insurance released preliminary requests by insurers for 2017, and the results are striking.
UnitedHealthcare and Humana are pulling out of the state all together, Rocky Mountain will only be offering plans in Mesa County, and Anthem will no longer offer PPO plans. To add insult to injury, rate hikes will be in the range of 26.8 percent (Anthem) all the way up to 40.6 percent (Golden Rule).
Pitkin County, which is part of the insurance commission’s designated resort region, was already considered the most expensive place in the country to buy health insurance, according to a 2014 Kaiser Family Foundation study.
In the past three years I have seen my monthly premium double, while at the same time my yearly deductible has also more than doubled from $3,000 to $6,550.
To put that in perspective, if I were to suffer from a skiing/biking accident that required doctor visits, X-rays, an MRI and physical therapy, I would easily hit my deductible. Add that to the cost of my premiums, and my yearly health insurance costs would exceed $11,000.
Recognizing that Anthem is a publicly traded company with the goal of maximizing shareholder profit, it is clearly meeting its stated goals. Its 2015 income from operations was $2.56 billion (with a “B”). And their top executive pay — for just six people — was just less than $35 million, with the CEO taking home $13.6 million of that chunk. In recent years health care expenditures have been declining; therefore, it can only be construed the purpose of the massive rate hikes is to further increase profits in the industry.
Meanwhile, as housing and living costs continue to increase across the country and in our backyard ($18 cocktail at Justice Snow’s, anyone?), most employees are experiencing stagnant wages. For those employees who have employer-sponsored health plans, one of the reasons for wage stagnation is that their employer is subsidizing their health care costs and are helping to cover the ever increasing premium costs. Small-business owners and those who purchase individual plans see the monthly premium bill and immediately recognize the large impact on their earnings. Rising health care premiums affect everyone.
Locally, the Valley Health Alliance — comprised of the Pitkin County and Aspen governments, the school district, Aspen Skiing Co. and Aspen Valley Hospital — is a collective designed to limit health care costs. It is unclear on the progress they have made to date; however, the small-business owners and individuals who are not part of the alliance continue to face yearly rate hikes that are untenable.
While those in the industry and some lawmakers will argue that the rate hikes are offset by the subsidies created under Obamacare, the reality is that those subsidies quickly phase out. The threshold is around $97,000 in yearly income for a family of four, or $47,000 for an individual. So a single individual making $48,000 pre-tax receives no subsidy, yet may spend in excess of $4,000 a year on health insurance premiums plus $18,000 or more on housing if he is lucky enough to find it. After factoring in food, clothing, car insurance and other basic living expenses, it becomes hard to get by, let alone get ahead.
So in addition to our housing challenges, I would venture to say that our valley is facing an unspoken crisis related to astronomical health insurance premiums. Combine these with the elevated cost of living in a resort town and it becomes obvious why we have a brain drain and our local demographics continue to shift toward an aging/retired population.
I implore our county commissioners, City Council and elected state representatives to find a solution to this problem. One possible fix is to eliminate the insurance regions within the state, which will help to average the premiums across the state’s population. After all, those in the metro areas also benefit from the tourist dollars spent in the resort counties.
Meanwhile, the Division of Insurance should deny the proposed rate increases and look toward creating a better model for determining and regulating rates.
Chris Council lives in Aspen.
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