Eagle County Commissioner Jill Ryan spent more than a decade working for the Colorado Department of Public Health before entering politics, but the job change hasn’t meant much of subject change as she continues to focus intensely on runaway healthcare and insurance costs in the mountain-resort communities she represents.
“People on the individual market have described their healthcare costs – their premiums, their out-of-pocket expenses, their deductibles – as paying a mortgage,” said Ryan, who has a master’s degree in public health. “So, it’s simply unaffordable, and what happens then, of course, is that young and healthy people drop out and say, ‘I’m not going to pay it, and insurance is based on a big risk pool.’”
With risk pools shrinking and insurance companies pulling out, mountain counties have some of the highest rates in the state, but Ryan, who’s seeking a Democratic vacancy committee nod to replace state Rep. Diane Mitsch Bush this fall, sees some hope in the bipartisan plan recently floated by Colorado Gov. John Hickenlooper and Ohio Gov. John Kasich.
“County commissioners and other elected officials have been working with the governor’s office on strategies to shore up the individual market for a while, and I’m really happy to see the governor lead on this,” Ryan said. “What they have proposed is exactly what counties like Eagle that have really high costs of health insurance on the individual market need.”
Health insurance rates for the individual markets in Colorado could climb by an average of 27 percent in 2018, and as much as 40 percent in some counties. People not covered by their employers in Eagle County already pay some of the highest rates in the state – up to $1,500 a month for a family of four – with deductibles in excess of $6,000.
With median home prices of nearly $420,000 and monthly mortgages in excess of $2,000, many of Ryan’s constituents are forced to choose between housing and insurance. Small businesses, which could see a 7-percent increase for small-group plans next year, are forced to reinvest to keep personal income low enough for owners to qualify for Obamacare tax credits.
“It really does hamper the ability of small businesses to make a profit,” Ryan said. “One [constituent] told me, ‘I bought another truck. I didn’t really need it but I couldn’t keep that money as income and yet I’m barely making my mortgage payment.’”
The cutoff is $97,000 a year for tax credits under the Affordable Care Act. That’s 400 percent of the federal poverty level, but in mountain counties with sky-high costs of living for everything from housing to energy to health care, that means couples can’t make more than $50,000 each. The majority of families are two-earner households with some adults working more than one job.
“If you’re at 401 percent of poverty like a lot of small businesses or people in the middle class here who don’t get their insurance from their employer, that’s when [insurance] just jumps up,” Ryan said. “It becomes unaffordable, especially in an area where you have such a high cost of housing, childcare and everything else from gasoline to consumer goods.”
Mitsch Bush, a Steamboat Democrat who represents Routt and Eagle counties in House District 26, also was encouraged by the Hickenlooper-Kasich plan. She pointed to the plan’s tax exemptions for companies offering plans in underserved rural counties and Congress potentially allowing residents of underserved counties to buy into the federal employment benefit program.
“That’s a really fair, balanced and excellent solution and will certainly improve the market. Right now, the market is not functioning properly [in rural areas],” said Mitsch Bush, who’s leaving the legislature this fall to seek the Democratic nomination to challenge Republican U.S. Rep. Scott Tipton in the sprawling 3rd Congressional District. “We need to incentivize insurance companies, and also we need to incentivize our people, our consumers, to buy health insurance.”
Mitsch Bush ran a rural health-insurance bill last session to increase the eligibility limit for ACA benefits to 500 percent of federal poverty, addressing the so-called “doughnut hole” of coverage for Western Slope residents making between 400 and 500 percent of federal poverty levels. It passed the House but never made it out of committee in the Republican-controlled state senate.Mitsch Bush also likes that the plan attempts to address the so-called “family glitch” in which one household earner is eligible for individual employer insurance and another is not. When they try to get individual insurance on the state exchange, the income of their already-insured spouse is counted toward the $97,000 cap. The Hickenlooper plan would change that, Mitsch Bush says.
Tipton’s office did not issue a statement on the plan, and his spokeswoman could not be reached for comment late last week. The Cortez Republican represents the western portion of Eagle County and much of the Western Slope. U.S. Rep. Jared Polis, a Boulder Democrat who represents some mountain areas, including the eastern portion of Eagle County, did issue a statement on the plan:
“I am pleased that Gov. Hickenlooper and Gov. Kasich are promoting a bipartisan healthcare plan,” said Polis, who, along with Colorado Republican U.S. Rep. Mike Coffman, is a member of the congressional Problem Solvers Caucus. “I believe bipartisanship is key to making any progress on healthcare.”
Mitsch Bush said the healthcare crisis is one of the biggest reasons she’s running for Congress, and she’s hopeful most elements of the Hickenlooper-Kasich plan can be adopted quickly as lawmakers return from the August recess. Hickenlooper is scheduled to appear before the Senate Committee on Health, Education, Labor and Pensions (HELP) on Thursday.
Besides trying to stabilize the insurance markets as companies set rates prior to the Nov. 1 open enrollments deadline, Congress will also be faced with extending the suspension of the ACA’s Health Insurance Tax (HIT). Without other steps to bring down costs, some industry observers say the HIT should be delayed again in 2018, or prices will spike even more.
“I think it’s important to delay [the HIT] like that, because until we get these issues solved we’re not going to have anything close to a solution, we’re not going to have anything close to full enrollment, we’re not going to have anything close to affordability, or availability,” Mitsch Bush said.
But if Congress can implement key elements of the Hickenlooper-Kasich plan, Mitsch Bush says the HIT delay may not be necessary and some stability could immediately return to the markets. She particularly lauded the plan’s call for a temporary stability fund and its admonition that the Trump administration must fully fund the ACA’s cost-sharing reduction payments.
“Really, it’s about uncertainty in markets and how to bring more predictability back into markets and how to really help our individuals,” Mitsch Bush said. “[The plan] doesn’t solve all the problems, but it certainly will promote some solutions, and in particular get rid of uncertainty.”
She added that the American Health Care Act that Tipton voted for in May would have stripped away all the ACA’s taxes and massively destabilized the markets. The narrowly passes House bill was a nonstarter during failed Senate attempts to repeal and replace Obamacare.
Chris Romer, president and CEO of the Vail Valley Partnership (a valley-wide Eagle County chamber of commerce), was encouraged by the tone and substance of the Hickenlooper-Kasich plan.
“It is very encouraging to see a bipartisan and serious effort to address the looming problems with our healthcare systems,” Romer said. “I hope this bipartisan action by the governors gets things moving in D.C.”
Not only is the individual market (serving about 6 percent of Colorado residents) broken, Romer argues the lack of health-insurance stability and associated rising healthcare costs are hurting larger employers. He pointed to his organization’s membership polling.
Romer says he’s most intrigued by the plan’s suggestions to “modify and strengthen federal risk-sharing mechanisms, including risk adjustments and reinsurance to stabilize risk pools.”
“This opens the opportunity for innovative, regional solutions to mitigate risk by bringing together rural populations into a larger pool,” Romer said. “There could be a role for chamber of commerce organizations and other business associations to help bring people together.”