Giving Obamacare a Lift in Colorado

by Joshua Green,

Pricey premiums plagued ski country last year—but the state found a way to fix that. “It discriminates against rural Coloradans.”

When Marj Perry is working her 611-acre Cold Mountain Ranch in Carbondale, Colo., she’s surrounded by 200 head of cattle and the postcard-perfect scenery of the Roaring Fork Valley on the state’s Western Slope. What she isn’t surrounded by is many doctors. Cold Mountain is spread over two sparsely populated counties, Garfield and Pitkin, which are home to several pricey ski resorts. Those factors helped make Colorado’s ski country—which also includes Eagle and Summit counties—the most expensive insurance market in the country last year.

Perry and her husband, Bill Fales, were optimistic when they set out to buy insurance under the Affordable Care Act last year, but that soon turned to disappointment. “We’re self-employed, we’re 61 years old, and we make too much to qualify for the federal subsidies,” she says. In the end, Perry and Fales took advantage of a hardship exemption granted by the White House to people who found ACA-compliant plans unaffordable, and bought catastrophic plans with a $6,000 deductible.

A three-hour drive to the east, the news about the ACA couldn’t be more different—or better. “Denver may be the most striking example yet of the Obamacare theory working,” says Larry Levitt of the Kaiser Family Foundation, a nonprofit that studies health care. A new Kaiser study of health insurance costs in 16 major cities found that Denver’s fell the most—16 percent—since the ACA went live, based on a comparison of the benchmark Silver plan for a 40-year-old nonsmoker, the metric upon which federal subsidies are based. “Premiums never go down,” says Levitt. “It’s almost like the laws of physics. But in Denver and some other places you have insurers competing for market share, and that’s actually lowering premiums.”

Colorado’s experience highlights both the law’s promise and the challenges it still must overcome to work for everyone.

In February, Frank Hutfless, the Garfield County attorney, drafted a lawsuit claiming that Colorado violated anti-discrimination protections in the ACA by approving such expensive rates in ski country. “Candidly, we believe the way the state has implemented the ACA is illegal,” he says. “It discriminates against rural Coloradans.” He wants the state to combine rural and metro regions into a single rating area, but he has held off filing suit as the state tries to adjust. Colorado is now engaged in what may be the country’s most aggressive effort to narrow the insurance cost gap—an effort that could provide a model for other states.

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