At year’s end, The Sopris Sun was contacted by an insurance spokesperson from ValuePenguin — an affiliate of LendingTree — notifying the local newspaper that health insurance premiums in Colorado were set to increase at a larger rate than most states in 2023.
To be precise, ValuePenguin’s report indicated that Colorado rates would increase by an average of 19.56%, just behind Georgia’s 20.3% increase. The bulk of the data collected for ValuePenguin’s reports comes from the Center of Medicare and Medicaid Services. According to its website, “Average costs per state were calculated from silver plans for 40-year-olds.”
The Sopris Sun turned to Valley Health Alliance (VHA) for some local insight. VHA’s communications person, Allyn Harvey, was quick to point out, “We do apparently have [some of] the highest premium increases in the nation, but as a state overall, Colorado remains below the national average.”
In fact, a chart delivered along with ValuePenguin’s initial email did indicate that Colorado is ranked as the 36th “most expensive” state for premium costs. Wyoming’s premium costs are estimated to be the highest.
While there were likely multiple factors that drove Colorado’s overall rate increase, according to VHA Executive Director Chris McDowell, he hypothesized there to be two significant ones. The first being inflation and the second, an “unintended consequence” of Colorado’s public option.
The intention behind Colorado’s public option is to require insurance companies — UnitedHealthcare, Rocky Mountain Health Plans and Anthem, locally — to provide plans with lower premiums, yet more offerings. “In that, there was some cost shifting that went on, so I think that had an impact on it as well,” McDowell stated.
Beginning in 2014, VHA served six large local employers with self-funded insurance plans. Those employers assume the risk of their employees’ — and their families’ — healthcare costs as an insurance company would, and promote a value-based healthcare model. The Valley Health Alliance member organizations include Aspen Skiing Co., City of Aspen, Pitkin County, Aspen Valley Hospital, Valley View Hospital and Grand River Health Centers. Mountain Family Health Centers, all five local Chambers of Commerce, and regional primary care practices are also on the VHA Board of Directors.
Value-based healthcare diminishes the fee for service model and focuses on a patient developing a relationship with their primary care provider. Because, oftentimes, peoples’ medical visits are reactionary and they go straight to a specialist or the emergency room, and it ends up costing significantly more than a visit to their physician, according to McDowell. In the long run, the intention is that value-based care should lower costs for the insurer and the insured.
“This has been shown to improve outcomes and lower costs for patients and payers,” Harvey explained. “The benefits of this work extend beyond the VHA member organizations to the larger community.” This is because lower medical costs overall should result in lower insurance rates.
Furthermore, “Being uninsured or underinsured, which a lot of us are, really increases the total cost of care for everyone,” McDowell added. “There were two things the ACA [Affordable Care Act] was trying to accomplish. One was building a risk pool big enough to reduce the total cost … and the process and outcome of value-based care.”
In recent years, VHA saw a need to address rising health insurance costs for individuals between Aspen and Parachute who purchase their own health insurance (8-10% of residents) as well as for small businesses. They worked with Rocky Mountain Health Plans — a Grand Junction based insurer owned by UnitedHealthcare — which subsequently began offering individual plans for 2021 on the Connect for Health Colorado exchange. Additionally, United began offering coverage for businesses and nonprofits with up to 99 employees.
“On the individual exchange, Rocky came in with very competitive and even lower premiums than Anthem for the 2021 insurance year. In 2022, Rocky lowered its premiums nearly across the board and captured a significant share of the Aspen to Parachute market,” Harvey continued. “This year, premiums went up but remain lower than the national average by quite a bit.”