EAGLE -- This is the time of year that businesswoman Janet Jordan dreads: Open enrollment on the individual and small-group health-insurance markets and the inevitably of rising prices on Colorado’s Obamacare insurance exchange.
“Every year when I go through this, I have employees expressing anger and upset and spouses expressing anger and upset,” Jordan said. “It’s not easy to pick the plan and then tell your employees how little you’re going to be able to contribute to it for their families.”
Jordan is co-founder of Heartwood Custom Woodworks, a custom flooring and cabinetry company in Eagle, which she and her husband Carl founded in 1992.
It employs about 15 people, and Jordan says she has to offer some sort of insurance subsidy to find and retain workers in an increasingly tight labor market.
But Heartwood can only afford to pay half their employees’ insurance and nothing for their families.
“It’s the anti-benefit; it truly is, because insurance never goes down, it always goes up,” Jordan said. “Even before all of this [insurance-cost turmoil], we were experiencing 20, 25 percent increases [in premiums] every year as a small business, and it’s always been that way. It’s an anti-benefit, because it used to be when you offered a benefit, it was a very positive thing.”
Self-employed individuals and small businesses in Colorado and across the country have borne the brunt of rampant health-insurance cost increases since the federal Affordable Care Act (known broadly as Obamacare) kicked in fully in 2014.
Republican attempts to repeal and replace the ACA failed in 2017, and critics say the GOP has since worked to undermine the law with encouragement from President Donald Trump. Now Democrats, buoyed by the 2018 midterm election results, have promised to stabilize Obamacare and expand Medicaid.
But that’s all a lot of noise in Eagle – and across much of rural Colorado -- where there are typically only one or two ACA coverage options, and plans for a family of five can run north of $2,000 a month.
In mountain-resort counties, where everything from groceries to gas to housing costs significantly more than along the urban Front Range, it can be difficult for a family of five to live on $117,680, which is the income cap ($48,560 for individuals) to qualify for ACA tax credits that help subsidize insurance.
In Eagle County, home of affluent playgrounds like Vail and Beaver Creek as well as working-class communities -- there are only two ACA coverage options, Anthem and Kaiser. Before tax credits, a "bronze" Kaiser plan -- a category of individual health plan with lower premiums but with higher co-pay costs and often higher deductibles -- for a family of five costs around $2,200, while a similar Anthem plan runs more than $2,900 -- and those plans come with deductibles in excess of $6,500.
In Denver, the cheapest similar individual-market coverage for that same family of five is a Bright Health Bronze Plan for just under $1,650 a month -- the same price as a bronze Kaiser plan in El Paso County, before credits.
Connect for Health Colorado – the state exchange for individual health coverage under the ACA, open for enrollment until Dec. 15 for coverage starting Jan. 1 or Jan. 15 for coverage beginning Feb. 1 – has been touting mere single-digit increases for 2019, but some observers aren’t impressed.
“Some Anthem people here actually got rate decreases, but it’s already ridiculously high,” said insurance broker Bethe Wright of The Wright Insurance Co. in Eagle. “[Obamacare] was unaffordable in 2017; it went up 30 percent in 2018; and it was unaffordable in 2018. Even if it only went up 2 percent in 2019, it was still unaffordable two years ago.”
'A snowball effect'
While Republicans couldn’t do away with Obamacare in 2017, they did manage to strip out its individual-mandate tax penalties in their tax reform package. Those penalties were intended to bring more healthy people into the pool of insured Americans with the goal of bringing down the average cost of health coverage.
Supporters of Obamacare say the GOP move was an attempt to sabotage the program and will drive up costs for millions of Americans.
The U.S. Supreme Court upheld the ACA as originally passed as constitutional, but in the wake of the rollback of individual-mandate penalties, a Texas-led federal lawsuit backed by 20 elected GOP officials around the country sought to have Obamacare and its protections for people with pre-existing health conditions deemed unconstitutional. The White House and Justice Department are not standing in the way of those efforts.
A ruling in that suit is expected any day.
With those developments as a backdrop, Wright this year stopped signing people up for Obamacare plans and is instead selling US Health Group plans underwritten by Freedom Life.
The plans are considerably cheaper than Obamacare plans – with no danger of tax penalties in 2019 -- but are not ACA-compliant and can deny applicants for pre-existing conditions.
One of her clients recently obtained a US Health plan for four family members for $1,350 a month, but one child was denied for a moderate case of scoliosis, a curvature of the spine typically among children. Although the child's condition did not require the surgery, braces and other treatments that often are needed with scoliosis, the family was forced to obtain a separate, catastrophic-coverage Obamacare plan from Kaiser for $250 a month.
Wright says a family like that pulling out of Obamacare will lead to more ACA rate increases.
“It’s all a snowball effect,” Wright said. “Health insurance is cyclical, so in a couple years we’re going to see the impact of healthy people getting out of the Obamacare pool because they can qualify on non-compliant plans and not have to worry about the tax penalties.”
In Eagle County there are nearly 3,000 people on the individual insurance market, and statewide there are nearly half a million. Unchecked, their rates – after a brief respite from runaway increases in 2019 – will start going up precipitously once again, Wright predicted, and that’s bad for entrepreneurs and small businesses.
She has some clients – real-estate agents, mortgage brokers and other self-employed resort-area workers – who can’t accurately predict their income levels year to year, meaning they could face repayment and IRS penalties if they take tax credits to offset their massive Obamacare premiums but then go over the ACA income caps.
“It’s almost like you’re afraid to be successful, and that should not be the American way for small businesses,” Wright said. “It’s the American success story gone wrong. Don’t show any income; don’t be successful; don’t be proud of making money. There’s just too much government control when you’re having to work within that number timeframe.”
Jordan, the Heartwood Custom Woodworks co-founder, said she has an employee who she’s afraid may roll the dice and decide to forgo insurance in 2019 – a scary proposition in the event of a major illness or injury.
As she tries to hire people, Jordan finds the best prospects are married to someone who works for local government, because those are the jobs in her part of the state with the best health-insurance benefits.
“If the government employees, all the way up to the top, if they had to swim the same lane as the rest of us, that would solve everything,” Jordan said. “If governments had to start looking on Nov. 1 and deciding what plans they were going to sign up for and contribute the same amount of money to get their employees covered, … things would change.”
'You've got to administer it'
Newly elected Democratic state Rep. Dylan Roberts of Eagle has one of those government jobs as a deputy district attorney in the Fifth Judicial District, which includes Eagle County. Having recently knocked on hundreds of doors during campaign season, he’s keenly aware of the pressing problem of rapidly rising health care and insurance costs in his House district, which also includes Routt County, home of Steamboat Springs.
“Something has to happen or else the stratification of Eagle County’s socioeconomics is going to become even more stark really fast, because we’re losing those people in the middle who want to live here and want to start families here and want to be part of a productive middle class, but they can’t make it work because of health insurance costs,” Roberts said.
Roberts last legislative session ran a study bill that would have funded a hard look at setting up a public insurance option, allowing people to buy into a state plan at competitive rates and hopefully then drive down the prices of the private insurance companies. He’s also focused on forcing increased transparency for prescription drug and medical procedure pricing.
“Transparency is a place to start so that people can start having choices and answers as to why the prices are going up, and it might actually help insurance companies with controlling their costs, but if we’re ever going to actually reduce monthly premiums for people, it’s got to start with having more choices in the insurance market,” Roberts said.
Roberts’ efforts on both the transparency and public-option front passed out of the Democrat-controlled House but died in the Republican-controlled Senate last session. Now Dems have control over both chambers.
Colorado Attorney General-elect Phil Weiser said that various states’ attorneys general are in the trenches defending the ACA and its protections for pre-existing conditions . As Republicans continue to try to undermine Obamacare, Weiser told Colorado Politics that he’ll be part of a coalition of state AGs defending the law.
“A number of state AGs will be watching and be ready to say to the federal government, ‘You’ve got to administer this law. You don’t get to undo it because you don’t like it. You had your chance to repeal it, you didn’t, so you’ve got to administer it,’” Weiser said, adding the state can also act to fill the void if the federal government continues to dismantle the law.
“States do have some flexibility and role in implementing the law,” he said. “We need to take full advantage of our flexibility and autonomy to do the best we can in Colorado to make it work and, insofar as we can encourage competition and innovation through the ACA, I’m a big fan of that.”
Weiser worked in the Obama administration Justice Department when the ACA law was passed.
Of course, much of what Colorado does on the health-insurance front will depend on its newly elected Democratic governor, U.S. Rep. Jared Polis, who, as a congressman from Boulder, voted in favor of Obamacare in 2010 and has in the past spoken favorably of some sort of universal health care system.
During the campaign, Polis advocated a "Medicare for all" system extending Medicare-style benefits to everyone, while also advocating a partnership with other western states to, as he puts it, "pioneer a groundbreaking regional multi-state consortium to offer a common-payer system in the West to reduce prices, expand coverage, and improve the quality of care."
“We’re still in discussions with the new [Polis] administration coming in and what they want to do, but I’m pursuing both tracks [cost transparency and a public option],” Roberts said. “For Eagle County, the mountain region and Colorado in general, the biggest issue is the lack of choice, and so a public option is a great way to give people here a choice of health insurance options.”
'Fix the broken system'
While Democrats in the U.S. House of Representatives have prioritized health care after her party on Nov. 6 reclaimed the House for the first time in eight years, it seems highly unlikely the Senate, which remains under GOP control, will play ball – especially after Senate Majority Leader Mitch McConnell expressed support for the lawsuit on pre-existing conditions.
Even Colorado’s Senate delegation is split on how best to fix nation’s failing health care and insurance system.
“I’ve supported efforts to reform our health care system because costs continue to go up on Coloradans,” Republican Sen. Cory Gardner told Colorado Politics via a spokeswoman. “We can do better than what we have now, and Republicans and Democrats should be able to work together on new ideas that drive down costs.”
Gardner this session introduced legislation to yet again delay the Health Insurance Tax (HIT), which essentially acts as a sales tax on Obamacare plans to pay the cost of administering the law. Currently suspended for 2019, it’s estimated the tax will collect $16 billion that opponents of the tax say will be passed on to consumers if it’s reinstated in 2020.
“This is simply a tax that is being passed on to consumers who are purchasing coverage in the individual market, and why we’ve been concerned about it is because small businesses bear the overwhelming majority of the cost of the tax,” said Stop the Hit spokeswoman Clare Krusing, whose organization represents a national coalition of small businesses.
Another suspension of the HIT would save consumers about $420 a year each in Colorado, Krusing said.
“When you have a tax like the Health Insurance Tax that does exponentially increase by billions and billions each year, it really is the most backwards policy when you’re trying to make coverage affordable for the people who need it most,” Krusing added.
Gardner also has introduced legislation to make it easier for rural hospitals to recruit and hire physicians, and he’s working on telehealth policies to give people in rural areas better access to healthcare professionals.
“Politics can’t get in the way of attempts to fix Colorado’s rising health care costs in both rural and urban communities across the state, and I’m confident proposals I’ve introduced to delay the Health Insurance Tax and to make it easier for rural hospitals to hire physicians will pick up support as it’s clear we need to take steps to fix the broken system,” Gardner said.
Colorado Democratic Sen. Michael Bennet, a member of the Senate Committee on Health, Education, Labor and Pensions (HELP), last year introduced Medicare-X with Virginia Sen. Tim Kaine – a public option aimed at offering more choice and competition.
Initially it’s only aimed at areas where there are a shortage of insurers or higher costs due to a lack of competition, but eventually the plan would be offered in every ZIP code in the nation.
“We must take meaningful action to rein in health care costs,” Bennet told Colorado Politics via a spokeswoman. “I’m hopeful we can make progress to reduce costs and increase competition in the marketplace -- and one of the most effective ways to do this is with Medicare-X.”
And Bennet and Republican Louisiana Sen. Bill Cassidy are working on bipartisan legislation to protect patients from surprise medical bills – a major issue recently in Colorado.
“Increasing transparency is one of the most important steps we must take to improve our health care system,” Bennet said. “Patients deserve to know how much they are paying for health care services and procedures at the point of care. I’ll keep working with my colleagues to find bipartisan solutions like this to lower costs and improve patient care.”
CLARIFICATION: An earlier version of this story said the deadline for open enrollment in health coverage through Connect for Health Colorado is Dec. 15. Actually, while Dec. 15 is the deadline for coverage to begin Jan. 1, people who enroll between Dec. 16 and Jan. 15 will have coverage starting Feb. 1.