Colorado Health Care Costs Higher Than The Rest Of The Nation
November 10, 2008
Copyright 2008 Dolan Media Newswires
Colorado Springs Business Journal (Colorado Springs, CO)
November 7, 2008
SECTION: NEWS
LENGTH: 830 words
HEADLINE: Colorado health care costs higher than the rest of the nation
BYLINE: Amy Gillentine
Colorado is going to have a more difficult time competing on both the national and global stage because its health care costs are higher than the rest of the nation.The state's health plans will raise premiums by 13.7 percent during 2009, according to Lockton Group's annual health report survey. Nationally, rates will grow by only 6 percent."This is significant in that it demonstrates that the rate of increase in the cost of coverage in Colorado greatly exceeds the national average for 2009," said Bill Lindsey, president of Lockton Benefit Group in Denver. "This makes it harder for Colorado employers to compete. Moreover, the resulting plan changes place Colorado workers at a greater disadvantage in terms of higher deductibles, out-of-pocket expense and more significant premium cost sharing than their counterparts nationally. " The rapidly rising rates make cost the No. 1 concern for employers in the state."This is going to be a problem with companies migrating to Colorado because typically they do ask about insurance rates and benefits," Lindsey said. "But it also affects our exports. Someone who is manufacturing something in Colorado Springs might have higher prices than someone in a different state with lower health care costs. The product is going to be priced higher - and it's going to be a problem with competing. "Costs are higher in Colorado for many reasons."Colorado tends to have more small employers than the other states," Lindsey said. "And that makes for higher rates because they have less bargaining power. Our industry is heavily concentrated in service industry and tourism, and those groups have higher rates. "Some insurance plans blame recent legislation for rising costs. A law that forbids insurance companies from offering discounts based on health or past use of health insurance will take effect in January."We haven't seen really a decrease yet," said Janice Pramik, director of small group sales for Anthem Blue Cross and Blue Shield. "But we've just started working with companies for January renewals. And I'm expecting some companies will drop out of insurance coverage because of the increases. "Anthem plans an 11.7 percent increase in premiums for its small group markets, but with the discount gone, some groups could see increases of 25 percent or 30 percent."Some of the cost is just the cost of doing business," Pramik said. "About 50 percent of health care costs are attributable to individual behavior - smoking, alcoholism, obesity. The cost of care is rising every year, and we have to respond. "The number of uninsured people also leads to higher premiums, because hospitals and doctors shift the cost of caring to people with insurance, charging them higher rates. Colorado has a higher rate of uninsured than other states, Lindsey said.The cost shift includes higher employee contributions for single and dependent coverage, drug coverage, increasing deductibles, co-payments and out-of-pocket limits."Nearly 39 percent of employers reported that their plan deductible is $500 or greater," the survey said. "The results indicate a growth in HMO plans to 44 percent of those surveyed, up from 37 percent in 2007. "Higher deductibles are one way insurance companies are trying to keep costs down, said Jean Baker, executive director of sales for Kaiser Permanente in Colorado."We're also going with more cost-sharing," she said. "It's part of a trend, and it means more out-of-pocket expenses when you use health care, but it also keeps premiums down. And there are protections on the upper end - we have maximum out-of-pocket limits. "Kaiser is focused on affordability, but Baker admits that prices for health insurance could rise as people's economic fortunes suffer because of the lagging economy."There are a lot of drivers for costs, but we can't make plans unaffordable," she said. "And in most cases, we don't seem to be. We don't see people leaving small group markets in the state; it's been pretty stable this past year. "Another significant change is the number of employers offering high-deductible health plans, which increased from 3 percent to 14 percent during 2008. Employers also are switching to HMO plans.According to the survey, the number of employers in an HMO plan increased to 44 percent this year, up from 37 percent during 2007. Most employers, however, still offer PPO plans with higher deductibles and out-of-pocket expenses."I'm not surprised because people tend to turn to HMO plans for the best value for their dollar," Baker said. "And when prices of other plans rise, they look at HMO plans. "Anthem is trying to offer a wide variety of choices to combat higher prices, Pramik said."We are trying to keep as many people insured as possible," she said. "New small group plans offer more affordability on the front end, with higher deductibles. New individual plans focus on providing insurance for major medical needs, but not so much the day-to-day care for people who are healthy. "
LOAD-DATE: November 8, 2008
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