While the rate of uninsurance in Colorado may have been the most highly anticipated metric of the 2013 Colorado Health Access Survey, the rate of underinsurance is equally important. Underinsurance occurs when health insurance does not cover the cost of necessary medical expenses, leaving policy holders with out-of-pocket costs that they can’t afford. Together, Colorado’s underinsured and uninsured populations total 1,461,361.
For families earning at least double the federal poverty level (FPL), the CHAS defines underinsurance as spending at least 10 percent of annual income on out-of-pocket medical expenses. For families below 200 percent of FPL, underinsurance is defined as spending at least five percent of annual income on out-of-pocket medical expenses.
Overall, the underinsurance rate rose slightly from 12.8 percent in 2011 to 13.9 percent in 2013. But digging deeper, the findings reveal that location matters in underinsurance. Residents of rural areas, notably those on the eastern plains and the southwest corner of the state, have the highest rates of underinsurance in Colorado. Health Statistics Region (HSR) 9 – including Archuleta, La Plata, Montezuma, Dolores and San Juan counties – has an underinsurance rate of 20.9 percent.
Though the ACA requires individual and small group market plans to include coverage for essential health benefits, the problem of underinsurance may persist because the most basic plans could still leave policy-holders with large out-of-pocket expenses that put a strain on their finances.