As open enrollment for 2020 health insurance has begun and as both individuals and businesses continue to worry about health insurance premiums that have increased enormously in the last few years, Tamara Drangstveit, CEO of Peak Health Alliance, took time to meet with Grand County residents about alternative options that the Grand County government is working to bring to its citizens.
Drangstveit met with individuals, small business owners, and school district representatives on Tuesday in Kremmling and Granby, to offer background of the non-profit health insurance exchange that has brought down insurance premiums in Summit County, helped the Grand County government minimize their employee health costs for 2020, and is working to do the same for Grand County residents.
Rising costs for health care and health insurance have been of high concern for years with Colorado’s average individual insurance premiums increasing 32% in 2018 and another 5.6% in 2019. Drangstveit states that, while health insurance costs used to be about 10% of a family’s budget, it is now closer to 40%. And it is numbers like these that prompted the Summit County community to seek an alternative option, creating its own insurance purchasing cooperative that would negotiate health care costs directly with providers by leveraging the purchasing influence of a community of buyers and then working with insurance carriers to decrease rates.
A further incentive was provided as the Alliance began exploring the costs of healthcare in the Summit County community. While an efficient hospital should be able to provide quality care at between 100% to 150% of Medicare costs, the Peak Health discovered that the hospitals in Summit were charging upwards of 500% of Medicare pricing for outpatient services and over 840% for emergency room services. A result— many residents went out of the county for health care, reducing the volume of service in Summit and, once again, promoting an increase in service costs.
But Drangstveit says that Peak Health, as a representative of Summit County health care consumers and unrelated to either health care providers or insurance providers, has been able to negotiate with both in ways that encourage accountability and reduce costs to consumers. Gaining letters of intent from local businesses, Peak was able to approach providers as repping 4,000 residents, a number with even greater power than that held by Anthem, the previously largest insurance provider in Summit, covering 2,500 individuals. They were also able to address other areas of concern, such as mental health care, prioritizing that residents not only have access to mental health care but are able to bill it through insurance. They focused on negotiating cheaper pricing with providers with higher quality outcomes. And they stood firm in protecting independent health care providers that are often shut out of insurance packages that cater to large health care conglomerates.
The result? Under Peak’s agreement with the local Centura-owned medical facilities, they have seen average hospital costs come down to between 250% and 300% of Medicare costs and insurance premiums drop considerably. Those premiums have dropped 30% in some cases for individuals and between 15% and 27% for area small businesses.
And the organization is now working with Grand County Commissioners to offer the same in Grand County, beginning in January 2021. Grand County faces similar issues as do all rural communities on Colorado’s Western Slope. Premium costs have sky-rocketed. Local care is expensive, though Drangstveit says that the costs of non-profit Middle Park Health are much more affordable, in comparison to other hospitals, with average pricing between 150% and 200% of Medicare costs. And residents often do not patronage local providers, seeking service outside of the county. But the hope is that the many strategies of the Alliance, such as leveraging community-specific data, will result in both less expensive insurance premiums and even more affordable high-quality local care.
Attending business owners asked pointed questions and Drangstveit answered each in turn, assuring them that the shopping for and purchase of insurance would remain the same process, being offered through Connect for Health Colorado’s health marketplace; that specialists would be accessible through individual pre-authorizations, even if they are not available in-network; that basic services would be provided without having to meet a deductible; that there would be no exclusion for pre-existing conditions; that small business would only need to have two unrelated employees to qualify for group plans, as opposed to the traditional five employees; and that decision-making would always remain local.
“We feel so strongly that communities must be able to take back control of these decisions. Local communities must have decision-making in order to ensure access to the most affordable options with the highest-quality outcomes,” noted Drangstveit. “We’re very optimistic about what this can do for Grand County.”
Grand County Commissioner Kristen Manguso agreed, saying, “We are excited that we will be able to offer this and have high hopes that this will really benefit Grand County. We are hopeful it will reduce health care costs for everyone.”
And it is indeed the County government that is leading the way on the initiative locally. Commissioners decided in October to move forward with Peak Health for their 2020 employee health coverage, avoiding a large quoted premium increase and allowing the County to continue subsidizing premium costs for employees and their families. There has been some criticism about the decision, mainly that it restricts the majority of care to local providers. But… “We did insist on keeping certain providers in our network, such as Children’s Hospital and University Hospital for their cancer care,” explained Manguso.
In all, as health care costs continue to soar and health insurance becomes both more expensive and less accessible for both businesses and individuals, the partnership with Peak Health Alliance is a welcome effort to help in a very basic need for most people. Peak Health will begin negotiating care costs with local providers, starting in the beginning of 2020. They will bid out fee schedules in March and April and file those schedules with the Department of Insurance in May. By the end of next summer, full plans should be available for review by Grand County consumers and the plans will be available by open enrollment for 2021. For more information, visit PeakHealthAlliance.org.