Summit Chamber introduces cost-sharing health plan, but regulators warn about consumer risks
December 13, 2018
Medical cost-sharing health plans are being touted as the "Uber of health care" for the potential disruption they will cause to the regulated health care industry, and as a needed option for small businesses in the High Country unable to pay high health insurance premiums for their employees.
The Summit Chamber of Commerce has introduced its own version of a cost-sharing health plan, the "Summit Choice Health Plan," which chamber executive director Judi LaPoint said can be seen as a viable alternative to health insurance to help pay emergency medical bills and get some preventative care.
"We've been very concerned about the high cost of health care in Summit County, especially for small business owners," said LaPoint. "It's a problem that doesn't seem to be going away anytime soon."
LaPoint emphasized that the plan is not health insurance. Medical cost-sharing arrangements are not regulated at the federal or state level, so there is a real risk of loss and no guarantee of coverage.
However, Colorado's insurance regulator is fuming about the way the chamber's plan and plans like it have been marketed toward consumers, saying they might mislead consumers into believing they are the same as actual health insurance.
Believing cost-sharing is the same as insurance is problematic, as the cost-sharing plans do not guarantee any coverage or payment to patients or providers, with both risking not being paid after treatment is rendered.
Recommended Stories For You
Medical cost-sharing programs are nothing new — they've been around in one form or another for decades. They originated with Christian ministries and until recently, faith-based organizations were the only common form of medical cost-sharing pools. Faith-based, cost-sharing ministries are meant to be a way for congregants to help each other out with medical bills.
Cost-sharing pools have frequently been floated as a solution to high insurance premiums for businesses in the High Country. The Summit Chamber was approached by the Vail Valley Partnership to consider a cost-sharing plan like theirs. Vail Valley's cost-sharing plan, which is run in partnership with the Small Association Leadership Alliance Healthcare Program, seemed like an ideal solution for Summit County's small businesses.
The Summit Choice plan is aimed at people who are relatively healthy, don't have pre-existing conditions and really can't afford even the cheapest health insurance plans available on the marketplace. They are not meant for people with pre-existing conditions or large businesses.
The way the Summit Choice plan works is for eligible chamber businesses — which can include all employees and their families on the plan — to pay a monthly "share" into a common pool. In exchange, members can draw from the pool to reimburse major medical expenses. Full details about the plan are available at SummitChoiceHealth.org.
With certain major medical events or illnesses, such as an ACL tear while skiing, the participating member would self-pay at the time of treatment. The amount paid at that initial treatment point depends on the level and cost of the member's monthly "share." When treatment is completed, the patient would collect all of their bills and send them to Sedera Health, the medical cost-sharing provider that pays out of the pool, for eventual reimbursement.
If the claim is accepted, Sedera will attempt to negotiate a lower cost with the provider. Sedera will then send the member a check within 30 to 60 days with a certain percentage of the total bill to pay providers, while the member covers the rest on their own. Members are expected to exercise high self-responsibility, including attesting to not using illegal substances when applying for the plan. Furthermore, injuries or illnesses related to drugs or alcohol are not covered.
While the Choice plan claims total costs to the member under the plan might be up to 60 percent less than going it alone, there is no guarantee that Sedera will be able to negotiate a lower cost, or even pay for anything if the claim is denied. Unlike health insurance, these cost-sharing plans do not guarantee coverage for any major medical problem. Payment is entirely at the program's discretion, and neither the Summit Chamber nor Choice plan members are liable for an individual member's health costs. Rates are "locked in" to go up no more than 9 percent for four years, but may increase if monthly medical payments exceed share payments.
In its initial advertising, Summit Choice billed the plan as an affordable alternative to traditional health insurance, as well as it being "ACA compliant" by providing the minimum essential coverage as required by the law.
However, when asked for comment on the Summit Choice health plan and its claim of ACA compliance, state insurance commissioner Michael Conway said they were not. Conway then contacted the Summit Chamber on Wednesday afternoon requesting they revise their advertising, as ACA compliance claims may mislead consumers into thinking it was health insurance.
"This plan is not ACA compliant," Conway said. "It is incredibly misleading that these parties are advertising the plan as ACA compliant. I have a high level of concern that these misleading statements will result in substantial consumer harm."
Conway said that the plans are not ACA compliant as they don't always cover pre-existing conditions, contain waiting periods for people with pre-existing conditions and don't cover mental health. Additional stipulations, such as revoking membership for illegal substance use and barring drug or alcohol-related claims, are also not ACA compliant.
Conway also said that people who think regular health insurance is unaffordable may not be aware of federal tax credits, Medicaid buy-in eligibility or other ways to make health insurance affordable. He said he did not believe that cost-sharing plans like the chambers' are a viable alternative for actual health insurance, but acknowledged that his office doesn't regulate the cost-sharing plans because they are not health insurance. They are still a legal product that people can buy.
Tamara Drangstveit, executive director of the Family and Intercultural Resource Center, said she understood why people would look to these stripped-down cost-sharing plans instead of regular health insurance.
"It shows how desperate people here are for any solution to their health care costs, and I get that," Drangstveit said. "But I would really urge residents to consider these cost-sharing plans as a last resort, as they won't guarantee payment. There's a reason people have health insurance, because we can't predict what'll happen in the future. Do your homework and research the plans closely."
Drangstveit urged anyone in the county who need help finding a health insurance option that works for their budget to visit FIRC and consult one of their health care navigators. Visit SummitFIRC.org for more details.