In Colorado, gas, groceries and rent are all pricey in the ski country communities, including Keystone, Breckenridge and Vail compared to Denver, about 100 miles away. Health insurance costs more in the mountains of Summit and Eagle counties and residents are crying foul after being asked to pay a lot more than city folks for similar health plans.
Democratic Rep. Jared Polis’ district is in this area, with a high rate of uninsured. Health plans are so expensive that Polis has asked the federal government for some of his constituents to be exempt from the requirement to buy health insurance.
“The way the pricing came in under the Affordable Care Act is, it was anything but affordable in Summit and Eagle Counties,” he says. “Upwards of $500 to $600 a month, minimum. Whereas in other parts of my district, like the Fort Collins and Boulder area, the pricing is really good. You get a very strong, good insurance program for $300 to 350 a month.”
Colorado’s insurance commissioner, Marguerite Salazar, disputes the congressman’s assessment.
“I’ve been very pleasantly surprised to see that in some cases they’re able to get a lower cost plan than people with the same demographic information in Denver,” she says.
The prices Salazar’s talking about include subsidies that that can lower costs for people making below a certain income. Couples, for instance, can get a subsidy if they make less than about $62,000 a year. But Salazar’s argument didn’t impress people at a recent public meeting she held in Summit county.
“You try living in this county for two adults on $62,000 a year, you can’t do it,” one angry constituent said.
The median rent in Summit county is 24 percent higher than in Denver. Gas and groceries are more expensive here, and so is health care. Commissioner Salazar says that’s why she approved higher insurance rates here.
“So what you’re saying is we’re screwed, and there’s nothing you can or will do to prevent that,” a woman said.
“That’s not what I’m saying,” Salazar replied.
“Well, that’s what we’re hearing,” answered another attendee.
People here want their county put in a so-called “rating area” with other counties paying lower rates.
Ben Price, executive director of the Colorado Association of Health Plans, says insurers have to be able to charge people in different regions different prices, if not, “then you’re asking that other county to subsidize all the folks that live in the county that was more expensive.”
According to Price, insurers pay up to 45 percent more per person for medical care in the mountains than in Denver. So for companies to give people in high-cost counties a discount, they’d have to make up their loss by charging people in low-cost counties more, which wouldn’t be fair.
“This isn’t driven by the insurance industry,” he says. “These are driven by factual numbers about the cost of health care.”
Insurance companies have long charged people living in different places different prices for similar policies. And there have been pretty dramatic differences in what people pay from one side of a state to another, says economist Timothy McBride at Washington University in St. Louis.
Before the Affordable Care Act, he says, insurers were allowed to vary prices on a long list of criteria – including a person’s overall health, or for pre-existing conditions. Now, they can only do it based on age, whether they smoke and where they live.
“So in general, after the Affordable Care Act’s been passed, in most parts of the country, that variation across geographic area is probably better,” McBride says.
But not in Colorado. While price variation arguably hasn’t gotten worse in the state, more people are noticing the differences now. The law requires them to buy a minimum level of health coverage and low-cost bare-bones plans are no longer allowed.
Rep. Polis is working with insurance commissioner Salazar to bring rates down in the mountains. They’re optimistic it will happen next year. But people in the industry say they expect rates to be volatile for at least a couple of years until insurance companies get a handle on exactly how the health law is changing their business.
This story is part of a reporting partnership that includes NPR and Kaiser Health News.