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Negotiations to offer a new health insurance option that lowers costs for both employers and employees in Southwest Colorado appears to have paid off.

The Southwest Health Alliance, a group of local providers, businesses, nonprofit groups and economic development entities, announced it will offer a health insurance option beginning Nov. 5 that likely will lower health insurance premiums paid by most people.

“It depends on the type of insurance a person may have, but on average, premiums are 35% lower,” said Monique DiGiorgio, executive director of Local First.

Local First is the lead agency organizing the Southwest Health Alliance.

Health insurance policies – which will be from Bright Health and offered through Southwest Health Alliance – are Affordable Care Act compliant.

Employers or individuals interested in examining the plans to see if they better fit their needs can reach out to their brokers to learn details before Nov. 5, said Claire Brockbank, a health care consultant working with the alliance.

The new model for health insurance offered by Southwest Health Alliance is based on a plan developed first in Summit County by Peak Health Alliance, a health insurance purchasing alliance that now also operates in Grand and Lake counties.

Officials with Peak Health Alliance are partnering with Southwest Health Alliance – which will also function as a health insurance purchasing alliance, not an insurance provider – to bring the new model for health insurance policies to Southwest Colorado.

Residents in La Plata, Montezuma, Dolores and San Juan counties will be eligible for Southwest Health Alliance policies.

The model differs from traditional insurance because community partners, in this case the health alliances, first gather and analyze local claims data then the alliances negotiate rates with hospitals and other medical providers. Only after those negotiations does the health alliance seek bids from insurance carriers to offer group and individual health insurance plans.

Traditionally, insurance companies negotiate rates with medical providers and then set their rates.

The actual insurance plans offered by Southwest Health Alliance will be through Bright Health.

DiGiorgio said one of the benefits Southwest Health Alliance brings is simply the introduction of a new insurance carrier to the region, where in some cases only one or two insurance companies are selling plans.

Merida Odiorne, a health insurance broker, said one effect of Southwest Health Alliance’s entry into the market is that many competitors also are expected to offer slightly lower rates in 2021.

Some providers may announce they are lowering rates by a few percentage points, but individuals and groups might benefit before renewing their premiums to see if Southwest Health Alliance offers an even lower rate, Odiorne said.

“It does benefit to shop around,” she said.

The effort to bring new insurance plans to Southwest Colorado has been a long, winding road, with some setbacks.

Initially, Southwest Health Alliance, which formed in 2019, had planned to bring a plan to market in 2020, but organizing the effort and negotiating with local providers proved more complicated and difficult than anticipated.

In fact, Southwest Health Alliance organizers protested in front of Mercy Regional Medical Center in February, after Mercy declined to participate in a plan the alliance hoped to offer this year.

Now, both Mercy Regional Medical Center and Animas Surgical Hospital are on board with the plans the alliance will offer in 2021.

Mercy corporate parent, Centura Health, will provide out-of-area service for the plan, and the alliance also has agreed with Children’s Hospital Colorado in Aurora to provide out-of-area service.

Southwest Health Alliance plans will not offer dental coverage for adults, but will offer pediatric dental coverage through Liberty Dental Plan for policy holders’ children through age 19.

Suzanne Phare, a member of the Durango Chamber of Commerce, said she wants to get the word out to residents of Southwest Colorado who have given up on finding affordable insurance.

“These plans are affordable in a way that we haven’t seen in our region before,” she said.

[email protected] An earlier version of this story erred in saying Archuleta County is served by the Southwest Health Alliance.