Why is health insurance more expensive in Grand County?
November 22, 2016
Health insurance plans cost approximately 35 – 45 percent more if you live in Grand County than in Denver. I know, it sounds outrageous; these insurance companies must be gouging those of us in small markets, right? Most will be surprised to learn that this is not the case. The cost of providing healthcare in rural areas is indeed higher than in large cities.
Why? First, there is the capabilities of our local hospitals and emergency facilities. An individual experiencing a heart attack requires a Level II Trauma Center (TC) or better. There are only three Level I Trauma Centers in Colorado, all in Denver. There are fewer than 10 Level II Trauma Centers in the state, all in urban areas.
Middle Park Medical Center is a Level IV TC. Without getting too technical, many serious illnesses and/or injuries are on "flight for life", with a $20,000 bill (estimated) before you see a doctor. My first question was, "what would it take for MPMV or Kremmling to become a Level II TC?"
The requirements include surgeons, anesthesiologists, orthopedic surgeons and other specialists being within 20 (and sometimes 30) minutes of the facility 24/7. That means at least two of each specialist must live and work in the area. Obviously, this is not happening anytime soon, nor would most of us desire the kind of population growth required to increase the specialists required
We have learned that people in Grand County and other rural locations live longer than those in large cities like Denver. While obviously a "positive", it also means we are more likely to have hip replacements, new knees, sometimes living long enough to have two replacements. It does not take much research to understand that those living to 85 will spend more for their health care than those that pass at 80.
In conclusion, the insurers basically determine premiums for a geographic area by evaluating the claims, and thus the cost, of providing coverage in that area. Without a larger population, including the specialist physicians necessary to provide care for serious illnesses, this will not happen soon. One thought is to lobby the insurers to change how they define a geographic are, such as making the entire state of Colorado one "rating" area.
Likely results of the Trump presidency: President-elect Trump has stated that he will keep the ability to include children on your plan up to age 26. He also does not want to take away the ability to obtain coverage with no exclusions for pre-existing conditions.
One of his "fixes" stated during the campaign was to allow individuals to purchase coverage across state lines. I question the benefit of this approach. If everyone in a high-priced area like NYC purchase plans from an inexpensive location, say Nebraska, the Nebraska rates would soon mirror the higher costs of New York.
On a smaller scale, however, if everyone in Colorado were on the same rating scale, the vastly larger population in Denver would have slight premium increases, while those in rural areas such as Grand County would experience significant rate reductions.
Open enrollment has started. In the meantime, the law has not changed yet, and is not likely to change for 2017. For help with obtaining coverage for you or your business, contact Rocky Mountain Benefits at 303-674-4773, or email us Leah@RMBen.com.
Gary Glass is the founder and owner of Rocky Mountain Benefits, LLC. Started in Evergreen, Colorado in 1995, he now lives in Grand Lake. He received his BA and MBA from the University of Georgia. His daughter Leah Denzel now handles most of the day to day operations of RMBen. They can be reached at 303-674-4773, or Leah@RMBen.com. They can assist you in enrollment in individual plans with the exchange or off-exchange, as well as helping to establish group plans. RMBen has worked, in association with the Grand County Rural Health Network for several years helping to enroll Grand County residents. Thanks to Jen Fanning at GC Rural Health Network for input and research for this article.
This is the third in a series of articles written by Rocky Mountain Benefits discussing the rising cost of health care in mountain communities. The next article will further address how to fix the huge rate increases in health insurance. Send input, opinions, and questions to Gary@RMBen.com for inclusion in the next article.