Colorado health-care costs bill passes Senate, nears governor’s desk
April 21, 2016
The health-care bill moving through state Legislature that would create a study to identify what sets the cost of insurance premiums throughout Colorado passed in the Senate Wednesday morning and should soon land on the governor's desk.
House Bill 16-1336, sponsored by Sen. Kerry Donovan (D-Vail) and co-sponsored by Sen. Ellen Roberts (R-Durango), received final approval in the Senate by a vote of 25-9 with one excused following prior Senate committee endorsement last week. The bill passed in the state House with a vote of 54-11 on April 1 with Reps. Millie Hamner (D-Dillon) and Bob Rankin (R-Carbondale) acting as its sponsors.
The proposed law, which now heads back to the House for concurrence on a minor Senate amendment — that the Division of Insurance (DOI)'s findings be reported to the Senate's Health and Human Services Committee, in addition to the Colorado Commission on Affordable Health Care — would require completion of the study by no later than Aug. 1 of this year. Proponents of the bill see it as the initial action for ultimately lowering health-care costs around the state for those disproportionately affected by heightened premiums, particularly in the state's resort areas.
"This is such a positive step forward," said Summit County Commissioner Dan Gibbs. "I wish I could wave a magic wand and say, 'Premium costs will be cheaper tomorrow,' but I know that this will help set the framework for really understanding and looking at possible next steps that can affect health-care costs directly."
Gibbs, a former state senator and representative, has been instrumental in campaigning on behalf of the bill, acting in his spare time at the Capitol as a volunteer lobbyist for its passage. Seeing how many residents in the county, as well as in the Western Slope community, have been forced to move away due to paying premiums at the rate of a second mortgage, he made reducing health-care costs in the region his pet project.
"Many people in our community are getting priced out," he said. "We need action right away. This is not an analysis that will be going on for two years or anything like that. It's going to happen quickly."
Recommended Stories For You
HB 16-1336 calls for the DOI to look at the feasibility of moving to a single geographical area for how health insurers set the price of policies for individuals, specifically looking at the impact of such factors as prescription drugs, diagnostics and provider rates. Colorado presently operates under a nine-geographical rating system that was established when plans for providing health insurance through a state exchange were submitted per the requirements of the Affordable Care Act (ACA).
Under current law, insurers are allowed to use these regions as a means for deciding premium prices, and the mountain and rural areas are some of the state's — and nation's — highest. The thought is that if a single-region system were created, then there would be no variances in price based solely on a person or family's zip code.
Sen. Beth Martinez Humenik (R-Thornton), who voted in favor of the bill on Wednesday, previously stated that the costs of health care and potential data from this study affect not just resort communities, but also the state's populations in much larger, urban areas as well. Martinez Humenik, a member of the Health and Human Services Committee, compared the logical demand for this probe to the desire to properly understand the price of produce from one location to another.
"People are trying to make sense of why their insurance rates are so high," she said. "Here in the metro area at a grocery store, an orange is $.29. You go to a mountain community and it's $.98 for that same orange. We really do need to get this updated information and really delve into what is driving these costs to be so dramatically different when you're getting the same types of product, just in a different location of the state. Without that information, you cannot make an informed decision or even try to make change."
Not Just A Bill
The study's report, assuming Gov. John Hickenlooper signs it into law, would be available by August. Colorado Insurance Commissioner Marguerite Salazar noted, however, that it is unlikely — if not impossible — for the new data to affect the premium rates for 2017 that are presently being set by insurers. Still, other backers of the bill argue that, as it stands — and regardless of if the state eventually moves to a single-geographical area system down the road through further legislation — the lack of transparency for what makes the rural and mountain regions so much more expensive than the big cities are the particulars necessary to one day help provide some relief.
"Repeatedly," said Sen. Donovan during a committee hearing last week, "I think you heard the tale of the struggle to get answers. We know we have an effect, but we have a severe lack of objective information on the cause. We just want the information at this point for this specific issue so we can chart a path forward."
Opponents of the proposed law contest that the bill has an underlying, ulterior motive: to unquestionably shift the state to a single geographical region. That, in turn, will simply disperse the costs of health care throughout the state in order to cover the added expense for those who live in these more remote areas rather than lowering costs.
"This isn't just a study," said Sen. Kevin Lundberg (R-Loveland), chair of the Health and Human Services Committee. "This is a study aimed at spreading the higher-cost areas around the rest of the state. If this moves forward and becomes a policy of a single area, that would guarantee higher rates for every other area in the state. We've got to find some solutions. I'm absolutely convinced and committed to that, but I want to see the ones that really work."
Gibbs disagrees, saying there's no predetermined result from the study, and that, in fact, were the costs of health care hypothetically distributed among the state's entire population, that's actually how every other form of insurance works.
"If there's a major hail storm in Denver," said Gibbs, "we get dinged up in the mountains for it. But there's no particular outcome. This will really help us bring meaningful information that we currently don't have in terms of what the cost-drivers are in our area, but also (others) as well. I'm hopeful that the governor signs this."