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Rocky Mountain High Insurance Prices Rankle Ski Towns

Colorado Insurance Commissioner Margeurite Salazar has been getting an earful about high health insurance premiums in pockets of the state since prices she approved were unveiled Oct. 1. She is under increasing pressure to do something about them now that part of Colorado has been identified as having the most expensive premiums in the country.

Colorado resort towns like Vail are known for their skiing, but it's the ranking as one of the most expensive places to buy health insurance that has brought attention to them recently (Photo by Connor Walberg via Flickr).

“To hear that they’re the highest in the country is very startling to me,” Salazar said upon learning where Colorado’s four-county “resort” insurance market ranks. The area includes the towns of Aspen and Vail.

One of the counties is now threatening to sue Salazar for approving the high rates, reports Health News Colorado.

Kaiser Health News compared premiums in new geographically delineated health insurance markets created by the Affordable Care Act nationwide. In central Colorado’s ski resort counties, the lowest-cost, silver-level plan costs $483 a month. That’s $22 a month more than the same level plan in the next highest-price market, a 12-county region of southwestern Georgia. It’s $100 a month higher than premiums in the ninth most expensive health insurance market, Fairfield, Conn., a tony suburb of New York City.

Many resort county residents “were hoping that the ACA would be able to provide some kind of affordable coverage for them, but in fact there’s a whole group of people … finding themselves priced out,” Salazar says.

She also points out that ski country residents have long paid more for health coverage than Colorado’s urban denizens.

“The biggest difference that we have with the ACA is the transparency,” she says. “People didn’t realize how much more they were paying than people in Denver (before the ACA).

“I think transparency has been a good thing,” Salazar says, but, “we need to figure out how to balance these things out. … It doesn’t really help to have all these (health insurance) plans if nobody’s going to be able to purchase them.”

Critics of the law say it’s making things worse for people in high cost insurance areas, because they’re required to buy a product many of them previously bypassed. The ACA sets minimum benefit levels for health policies, meaning the skimpier coverage people purchased in the past is no longer available.

Rep. Jared Polis, a Democrat whose U.S. House district includes part of the resort area, last fall asked the White House to give people living there a waiver from the ACA’s requirement to have health insurance. No waiver was granted, and Polis has said little on the subject since.

Salazar emphasizes that not everyone has to pay the full sticker price. People making less than $45,960 a year qualify for subsidies to reduce their insurance costs. Average incomes for each person in the four-county resort region ranges from a low of $26,989 in Garfield County to a high of $54,428 in Pitkin County.

The reason Salazar says she approved higher insurance premiums in the resort counties is because prices for health care services are higher there. The average payment for in-patient hospitalization in one resort county, for instance, is 61 percent higher than the rest of the state. Setting premiums too low, Salazar says, would drive carriers from the market, decrease competition and send insurance prices even higher.

The reasons why health care services cost more in the mountains are complicated, Salazar says, and, since Colorado’s Division of Insurance doesn’t regulate health care providers, “it’s really hard for us to start wading into those discussions.”

Salazar says she will convene meetings with Colorado’s hospital association, insurance companies, local health improvement groups and others to generate cost containment ideas. She had hoped to alter the geographic ratings for 2015 but stepped back from that plan because there wasn’t data to support it. She says one state lawmaker from the resort region is contemplating asking for additional subsidies for residents of high cost areas.

High premium areas generally reflect a lack of competition between insurers or health care providers, or both.

In each of Colorado’s highest-cost counties, which have low populations (ranging from 17,263 to 56,963), there is only one small hospital. Larger medical centers are far away over roads that can be impassible in winter. All have an adequate number of primary care providers, as defined by the federal government, but local specialists can be hard to find.

There is significantly less competition among insurance carriers in the mountain resort counties than in urban Denver. Colorado’s health insurance exchange offers a total of 41 plans from four carriers in the resort region, versus 78 plans from eight carriers in Denver. The lowest price silver plan for a 40-year-old Denver resident is $200 a month less than a comparable plan in the resort counties.