While Washington Plays Politics, Colorado’s Insurance Exchange Tries To Stay On The Ball

Ryan Warner: This is Colorado Matters. From CPR News, I'm Ryan Warner.  There is a lot of uncertainty in Washington around the Affordable Care Act, and it may have Coloradans who get their insurance from this state's exchange wondering about the future. So, let's check in with Kevin Patterson, CEO of Connect for Health Colorado, where nearly 200,000 Coloradans find coverage. Kevin, welcome to the program. 

 

Kevin Patterson: Thanks Ryan for having me. 

 

RW: How stable is the individual health insurance market in Colorado, right now?

 

KP: I really appreciate that question. We received a report, couple weeks back, and it came from Centers for Medicare and Medicaid Services, and it really looked at and it ranked each state's risk mix. Just basically, who's participating in your health insurance market, do you have a lot of people that are with chronic conditions, a lot of people that are having heavy claims.

 

RW: So it's a picture both of the insurers and of the insured?

 

KP: Exactly. What this report showed, is that in Colorado we actually ranked number one in that mix of folks, of having more healthy people participating in the exchange as well as those that were needing maybe some more urgent kinds of care. We think that that's a good measure, as an indicator that Colorado's really in a good place around supporting what the state's efforts, around having the most healthy state in America. We think that's important. 

 

RW: Why is that mix important, in terms of the insurance market, that is not just be a pool of sick people who are individually covered?

 

KP: So it's just the basic tenets of insurance. You're trying to mitigate, or spread, that risk across a larger number of people. If you're on an employer sponsored program, insurers tend to like those because they know they are going to have a certain number of people, they have a pretty good history of how people have access care. I think the biggest difference with the individual market is we had a number of people that had not had access to care, and so being predictive around what their usage was going to be I think was a bit underestimated. So there's a little pent up demand there. 

 

What this risk mix tells us is that we have a number of people that are healthy, a good number of people still that may not be accessing care as much, and then some folks that are looking and have higher claims. It's spread around as best as we are in the nation. 

 

RW: So that's one picture of the exchange and of the insurance market in Colorado, but according to the Colorado Health Institute insurance carriers here have requested average premium hikes of 27 percent for 2018 on the individual market. That comes on the heels of a 20 percent average increase in 2017. There are more than a dozen counties in Colorado that have just one health insurer on the individual market. Is health insurance, even with the healthy mix you talk about, just becoming cost prohibitive?

 

KP: I believe cost is a prime consideration in health insurance. I think there's a few things in your question though, just give me a second to kind of parse them out a bit. 

 

RW: Yeah, sure. 

 

KP: One, I think, the rates are really based on claims data, and until last year there really wasn't a full year of claims data, just in the way that the Affordable Care Act had been implemented on its time line. 

 

RW: I think what I hear you saying there is that the market is still in a place of stabilizing after what is relatively a new law? 

 

KP: I think that's fair. So you've got a good chance now for insurers to actually see the history, and at first they said it was going to take about five years, and I think we're on year four of the implementation of a full four years of the Affordable Care Act. So these rate increases are really just based on what people are accessing in terms of care, and the claims that's around that. 

 

RW: Now, that might be cold comfort to someone who's facing this premium increase. To what extent will subsidies absorb the cost increases for those who qualify?

 

KP: Perfect question. What happens with the Affordable Care Act, we have, of course, the advance premium tax credit, APTC as we like to call it for short. When rates go up, so does the amount of the subsidy. It traditionally has been based on a silver plan, which is kind of middle of the road type plan, and we are able to see if a 20 percent increase in your rate happened last year, there were some counties where it actually caused a slight decrease in what the net premium was. 

 

RW: Will that be the case, do you think, for some Coloradans this year?

 

KP: I think that is always the case, when we see an increase in the rate. 

 

RW: But there will be some who pay at least something more, would there not be?

 

KP: There is no doubt there will be others that will pay more. 

 

RW: Do you find that most people, or a lot of people who qualify for subsidies know that they do?

 

KP: Actually, we just did a survey, and we were talking about these results with our board, actually what people do is underestimate their eligibility sometimes by three times, by a third. Where they think you have to make $40,000, or $30,000, you can make up to, for a family of five, over $90,000. We want to make sure people understand that even if they don't think they qualify, they probably should check. 

 

RW: To this idea that there are a handful of counties in Colorado with just one insurer on the individual market, I spoke a while back with Colorado's Democratic U.S. Senator Michael Bennet, who really questions the predicament that that puts people in. So, you have to have insurance under the individual mandate, and yet if you're on the individual market in some of these counties, you only have one seller of insurance. You are forced to buy a product that only one person is selling, or one company is selling. Is that right?

 

KP: I think that is an extreme challenge for a couple of reasons. One, we are built around, one of the tenets of our organization is really to provide choice. It's hard to say you're actually talking about choice when there's one carrier for your county. We certainly want to make sure that we continue to work with that one carrier, because we don't want that to be a bare county, as some of my neighboring states are dealing with where there's no one there. But I do believe that when we see competition, when we see people, companies really working for that competitive advantage for the clients, the customer does benefit, and I think we can actually begin to find ways to begin to drive down costs, which is something we're not set up necessarily to do, but we can reflect that in the cost that we show.

 

RW: So you acknowledge that is a weakness of the market in Colorado at this point?

 

KP: I would agree.

 

RW: There are claims that Obamacare is collapsing, but an audit found that Colorado's exchange is sustainable for the next few years. That could change though, auditors say if there were changes to the ACA, like President Trump's threat to eliminate what are called cost-sharing reductions. So these help lower expenses for the poor, they stabilize the market in general. If the federal government stopped these payments, as the president has threatened to do, what would it mean for Coloradan's on the exchange? Is that the death knell?

 

KP: I don't believe it's a death knell, I think it would be a huge impact for folks on the lower end of the eligibility spectrum. So anyone that's just a little above 200 percent of poverty, the cost-share reduction allows them to a subsidy that goes to the carriers to pay for a lot of those typically out-of-pocket costs. And if someone is barely qualifying for assistance, they're still working, they might have two jobs.

 

RW: So they don't qualify necessarily for Medicaid?

 

KP: They're not on Medicaid, so they're on my side. You have to think of a continuum of eligibility.

 

RW: But they're on the exchange.

 

KP: But they're on the exchange on our side. 

 

RW: They're vulnerable, you say.

 

KP: They are vulnerable with that because it would make them pay more out of their pockets to access care, which we think might prevent them from actually seeking care.

 

RW: You're listening to Colorado Matters, I'm Ryan Warner. And at a time when there are many question marks around the future of the Affordable Care Act, we're checking in with Kevin Patterson. He's CEO of this state's exchange.

 

Almost 200,000 Coloradan's get their insurance through Connect for Health Colorado, and I wonder if you hear much from Coloradans outside the health policy realm, and what they're telling you, their concerns about the Affordable Care Act, whether those concerns perhaps differ between urban and rural Colorado, Kevin?

 

KP: Wow, there's a lot in that question. So yes, there is a difference between what we see in urban communities and what we hear from our friends in the rural communities. I'm getting ready to do my annual tour outside of Denver for a couple of reasons. One, I think it's really important to talk to people and understand on the ground what's happening with them. And two, I think it helps to see what, and in smaller communities they're really collaborative around what they're doing to serve their community, and I think there's a lot that we can learn in the urban communities around how they're doing that.

 

RW: Give me an example, take me -

 

KP: So a perfect example is, I was just in Glenwood Springs, I was talking to a broker. Has a couple hundred covered lives in Glenwood. Works really well with Mountain Family Health. They figure out how to serve the client where they're coming in, because a lot of times the clients don't really understand if they qualify for Medicaid, if they qualify for my side. The eligibility rules are different, that serves to confuse people. And they really figure out what works best for that client and gets him or her or their family in the right place, and then they can pick the right plan for themselves.

 

RW: Confusion. Do you run into a lot confusion about the exchange?

 

KP: Yes. I mean, but there's so much I could say about that, but I think because we've only been around a small number of years, we're pretty still not well known, I think. And people don't understand what assistance is available, how the programs work. Remember the law change, it was a very thick piece of legislation. It's just a lot for people to process.

 

RW: So Congress adjourned for its summer recess without repealing or replacing Obamacare, but the vice president has said, "This ain't over by a long shot." What do you hope happens when they reconvene?

 

KP: Well, I think it's tough to say because I told a lot of friends of mine that my crystal ball fell after last November's election. It's got a big crack in it and I don't think I've been able to get it fixed, so it's hard for me to be as predictive.

 

RW: I'm not asking you to predict, I want to hear want you want.

 

KP: Oh. Well, I would hope that what we're hearing around bipartisan approach to actually solving some of the issues in the Affordable Care Act, are actually going to be some of the policy proposals we begin to see. People just want problems solved, they want to have different options, they want choice. I think there's ways to do that without completely throwing out the Affordable Care Act. I'm not saying it's perfect, but I'm also not saying it's failing. So I think somewhere in the middle there, is a place for us to do something that actually works for more people to actually have care.

 

RW: Would you like to see any particular changes to the exchanges?

 

KP: You know, I think what's really tough for people to understand is the eligibility on Medicaid where it looks backward in times, and for us it looks forward. So they're literally in two different planes of existence, and that's really confusing for people if they're moving from Medicaid. They make a little bit more money, they come to my side but the rules are completely different.

 

RW: However, the idea is not that someone necessarily stays on Medicaid, they may graduate to the exchange in the individual market.

 

KP: Yeah we think that that's actually a great thing because that means they're actually making more money as a family, and that's a good thing.

 

RW: In the last session, Republicans in the state legislature went after the exchange with the intent of eliminating it, perhaps moving people seeking insurance to the federally run exchange. That bill died. Do you think the exchange will be around in five years?

 

KP: Actually, I do. Until they tell me something different, we are right now the law of the land. But I think even more importantly, we're really close to our customers and even though we may not control the decision, we're able to reflect their opinions and what they want. And we think that's important.

 

RW: Thank you for being with us.

 

KP: I really appreciate the time, thank you.

 

RW: Kevin Patterson, CEO of Connect for Health Colorado, the state's insurance exchange. This is Colorado Matters from CPR News.