By Noah Zahn
Wyoming Tribune Eagle
Via- Wyoming News Exchange

CHEYENNE — Wyoming lawmakers and health care leaders gathered last week for the debut of the Legislature’s Health Insurance Affordability Task Force, a group charged with untangling the complexities of rising medical costs and insurance premiums in a state where geographical isolation often dictates the price of survival.

“Over two days of testimony, the task force grappled with the reality that Wyoming ranks fourth in the nation for hospital availability, but 36th for affordability, according to data presented by Co-Chairman Rep. Lloyd Larsen, R-Lander, to the task force.

He noted that affordability and access remain the “top one or two of all the conversations” legislators have with their constituents. Larsen discussed the economics of Wyoming, noting that while a hospital in Colorado might have 96,000 residents to support it, a Wyoming hospital averages 18,000.

In presenting this data, Larsen attempted to convey that while Wyoming has succeeded in making physical buildings available to its residents, the lack of population density and accessibility in rural areas makes the state-wide healthcare infrastructure exponentially more expensive to maintain than in more populated regions. Driving factors for this include insufficient patient volume, high fixed costs and lack of competition in rural and frontier areas.

While Larsen did not cite where he got the state ranking data presented, KF, an independent

source for health policy research and polling, ranks Wyoming as having the eighth highest hospital beds per capita in 2024 and 45th in Health care expenditures per capita in 2020, making it one of the most expensive states in the nation for healthcare.”

“The volume of patients is insufficient in a lot of our Wyoming hospitals to keep those costs at the same level as you see in more populated urban areas,” Larsen said.”

 

Two coverage gaps

On Wednesday, the task force identified two distinct populations falling through the cracks of the current insurance landscape. 

The first is the long-discussed Medicaid gap — roughly 16,000 to 19,000 adults in Wyoming earning below 100% of the federal poverty level who do not qualify for federal subsidies and for whom Wyoming has not expanded Medicaid.

The second, newer gap involves middle-class families and small business owners earning more than 400% of the poverty level. Following the expiration of enhanced Affordable Care Act subsidies from the Inflation Reduction Act, these residents are seeing premiums for a family of four exceed $4,000 per month.

Wyoming Department of Health Director Stefan Johansson explained that for this second group, the “obfuscating force” of federal subsidies has been stripped away, exposing them directly to the raw cost of care.

“My health insurance costs are out of control,” he testified personally.

Sen. Taft Love, R-Cheyenne, questioned the economic logic of current plans for these families.

“Why is it no longer efficient for me to buy insurance and not pool with a group of other small businesspeople and self-insure?” Love asked, noting that once a family hits the $20,000 annual cost mark, the traditional value of insurance begins to vanish.

“We’ve exceeded the opportunity to do what insurance is designed to do,” he said.

 

Insurance and inflation

Representatives from Blue Cross Blue Shield of Wyoming, the state’s only major medical insurer, argued that premiums are merely a direct reflection of the underlying medical costs. 

Dirk Dijkstal, senior attorney for Blue Cross, noted that Wyoming medical expenditures have risen an average of 6.5% annually since 1990.

Dijkstal explained that federal Medical Loss Ratio laws require insurers to spend 80% to 85% of premiums on medical claims. In recent years, Blue Cross has exceeded this, paying out 93 to 95 cents of every dollar for medical costs.

“Blue Cross of Wyoming could subsidize our entire population by not charging any administrative expense for a couple of years, and in a couple of years your premium would still increase,” added Rocky Redd, also representing Blue Cross Blue Shield.

Wyoming Insurance Commissioner Jeff Rude further detailed the regulatory picture, informing the task force that his department only has authority over about 10% to 12% of the Wyoming market. Large employer plans and federal programs like the Affordable Care Act exchange fall under federal jurisdiction, leaving the state with no authority to fix or take action on the majority of complaints, Rude said.

 

Uncompensated care

On the second day of the meeting, the focus shifted to the providers. Eric Boley, president of the Wyoming Hospital Association, presented data showing that Wyoming hospitals provided $141 million in uncompensated care in 2024, a 44% increase since 2017.

Boley described a “cost-shifting cycle,” where inadequate payments from Medicare (paying roughly 73 cents on the dollar) and Medicaid force hospitals to charge commercial insurers more to stay solvent.

“We are charging what’s necessary to keep the doors open,” Boley said. 

He warned that many Wyoming services, particularly obstetrics and emergency care, are “loss leaders” that must be subsidized by more profitable elective surgeries.

The task force spent significant time discussing Title 25, the state’s involuntary mental health commitment process, which Johansson called a “microcosm” of the uncompensated care issue. Hospitals are often left fronting the bill for expensive psychiatric stabilization with no clear mechanism to bill private insurance for involuntary stays.

 

Search for solutions

Sheila Bush, executive director of the Wyoming Medical Society, urged the committee to look at the math of medicine in frontier areas. She noted that the fixed cost of readiness for an ER is the same whether it sees three patients a night or 50.

She advocated for a recalibration toward valuing primary care, noting that countries investing more in primary care spend less overall on healthcare with better outcomes.

Bush highlighted that providing incentives for annual checkups and early diagnosis of chronic conditions like diabetes can save large amounts of money by avoiding catastrophic medical events like amputations.

Similarly, during public comment, Marguerite Herman of Healthy Wyoming pushed for Medicaid expansion, arguing that insurance changes patient behavior by allowing for early diagnosis.

The task force also explored the possibility of expanding the state employee insurance plan, known as EGI, to school districts or the general public. 

Tricia Bach, director of the Wyoming Department of Administration & Information, warned that EGI had recently spent $50 million of its own reserves due to high claims.

Kirk Schmidt, a retired school business manager, warned that forcing all school districts into the state employee insurance plan would “double the size” of the pool without necessarily decreasing costs, potentially even raising premiums due to the different risk profiles of teachers.

 

Funding sources

To support Wyoming hospitals, co-Chairman Sen. Tara Nethercott, R-Cheyenne, proposed having the state use its collective bargaining power to purchase medical supplies. Drawing an analogy with the Wyoming Liquor Division, which acts as the sole wholesaler for alcohol in the state, Nethercott suggested a state-run Group Purchasing Organization for medical devices like heart valves and knee implants.

“It’s a very unique model, but it could help consolidate our buying power to help lower costs for our hospitals,” Nethercott said, directing staff to draft a bill creating a state GPO administered by the WDH.

The task force also moved forward with a bill draft to repeal a grandfathering provision in the state’s 2025 non-compete law. Lawmakers heard testimony that many physicians are trapped by contracts signed before 2025, which limits competition and drives consolidation.

Other action items slated for the next meeting in August include the following:

• An analysis of reinsurance programs in Idaho, Montana and Colorado.
• A report on expanding medical education seats for nurse practitioners and physician assistants.
• A framework for how healthcare sharing ministries operate as an alternative to traditional insurance.

“We have four more (legislative work) days to provide health insurance affordability to the people of Wyoming,”  Nethercott concluded. “This topic is an elephant, and we are taking very small bites at it.” 

The task force will reconvene Aug. 14 to review the proposed legislation and further study the impacts of provider consolidation ahead of the 2027 legislative session.

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