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Health Law and Policy Update: Federal regulations should protect access, ensure accountability

This week's updates

Headlines of the week

Federal regulations should protect access, ensure accountability
The Colorado Center on Law and Policy on Monday submitted comments on federal regulations about three aspects of federal health reform: Medicaid eligibility, establishment of health insurance exchanges and tax credits for health insurance premium affordability. Among the recommendations:

  • State flexibility versus minimum standards for consumer protection: Regarding the exchange, while state flexibility is important in some areas, it is not as important as the need for minimum national standards that protect consumers. The Department of Health and Human Services should provide individuals and small businesses that will purchase insurance through the exchange with a uniform, minimum foundation that will protect their interests. Consumers purchasing health insurance through exchanges ought to be able to rely on core standards rather than be subject to state-by-state variation in the strength and effectiveness of the protections they receive under the Patient Protection and Affordable Care Act.
  • Eligibility for premium tax credits: When evaluating whether an employer-sponsored insurance plan is unaffordable, and employees therefore would be eligible for a premium tax credit to purchase insurance through a health insurance exchange, the threshold for premium affordability should be based on the cost of family coverage rather than the cost of employee-only coverage.
  • Ease of access: Federal Medicaid eligibility regulations should maintain or create standards for performance and accountability that further the goals of creating no-wrong-door access to health coverage and a streamlined eligibility and enrollment experience.
  • Program consistency: The regulations ought to reflect the importance of consistency of the application of eligibility rules between various categories in Medicaid and between Medicaid and the exchange.
  • Exchange governance: The insurance industry should not be eligible to serve on exchange governing bodies; the potential for conflict of interest is too high. If the insurance industry is permitted to sit on governing boards the regulations ought to more clearly define who is an industry affiliated person to ensure people with no industry affiliation comprise the majority.
  • Appeals: The regulations should include more specific requirements around appeal rights and notification requirements when people lose or are declared ineligible for premium credits.
  • Information technology systems: Federal oversight and accountability is critical for system readiness for exchange information technology systems.

Governor proposes increased Medicaid spending to accommodate caseload growth
Gov. John Hickenlooper's budget request, delivered to the Joint Budget Committee on Tuesday, calls for cutting education funding by $179 million and increasing Medicaid spending by $346 million. The recommended Medicaid spending increase includes $186 million from the state General Fund.

Colorado's Medicaid caseload is projected to increase by 60,000 people, or 9.76 percent as a result of population growth and the continuing effects of the economic downturn. Some caseload growth is the result of Senate Bill 09-1273, which established the Hospital Provider Fee. The fee makes it possible for Colorado to enroll adults without dependent children and working people with disabilities in Medicaid next year. Those expansions are funded by the fees collected from hospitals, which are used to draw down federal matching Medicaid dollars. No General Fund money is involved.

About one-third of the Medicaid budget increase is related to caseload growth and increases in per-capita spending. The remainder is driven by increases in nursing facilities, the Program of All-Inclusive Care for the Elderly and Medicare premiums.

The budget request also includes $48.9 million in reductions and savings in the Medicaid budget including:

  • $1.8 million in savings from improved care coordination and case management through the Accountable Care Collaborative project.
  • Reductions through rate adjustments to realign incentives and service restrictions as well as savings through efficiencies.
  • $3.4 million in savings and reductions through cost-sharing increases in Child Health Plan Plus (CHP+) and Medicaid. The CHP+ increases include a tripling of enrollment fees for families with incomes between 200 percent and 250 percent of the federal poverty level, as well as copayment increases for most income groups in the program. Those changes are the governor's response to Senate Bill 11-213, a measure Hickenlooper vetoed, which proposed more significant increases in cost sharing in CHP+. The changes are already under way through the rulemaking process. The budget request also proposes to increase Medicaid copayments to the maximum level permitted under federal law.
  • Anticipated increases in the performance-based incentive payments the state is receiving from the federal Children's Health Insurance Program Reauthorization Act.
  • An initiative to reduce beneficiary fraud and error.

Overall, 91.9 percent of the net General Fund increase the governor proposes is to fund growth in Health Care Policy and Financing, and the Department of Corrections. The governor proposes to provide services to 173 people with developmental disabilities in emergency or high-risk situations, and youth transferring out of the child welfare system, at a cost of $4.9 million. That is significant -- people with developmental disabilities can wait a decade or more for services.

The budget request also proposes to suspend the Senior Homestead Exemption but provide some services for lower-income seniors by expanding the Colorado Property Tax/Rent/Heat rebate program by $9.5 million.

Conversation on Colorado's fiscal challenges continues after Proposition 103
Voters in Tuesday's statewide election rejected Proposition 103, a measure that would have enabled the state to temporarily halt reductions to education spending. The Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy, was among the main organizational backers of the initiative. Fiscal Policy Institute Director Carol Hedges reflected on the outcome in the following message, sent Wednesday.

The results of the Proposition 103 election were certainly not we had hoped to see. But disappointment will not stand in our way as we continue to work to advance the health, economic security and wellbeing of low-income Coloradans. I want to thank all of you who made a special effort to pass Proposition 103. It was not a perfect solution but one that would have avoided additional cuts to schools and universities. Unfortunately, Gov. John Hickenlooper's 2012-13 budget, released on Election Day, sets kindergarten through 12th-grade education cuts at an additional $160 per student and slashes nearly $30 million from need-based financial aid for college students.

One lesson reinforced by the Proposition 103 results is that it is much easier to get people to vote no than to vote yes. We must remember that lesson as we continue our work. The Taxpayer's Bill of Rights empowers voters to make important decisions about the size of our collective investment in public services. An essential component of our work is to help voters understand the importance of that decision-making role and help them identify the role those public services play in our communities.

Proposition 103 did succeed in giving voice to thousands of Coloradans who understand public investments make a difference in our quality of life. Thousands of people in hundreds of communities stepped up for our kids and our communities. We must work to make sure the foundation laid during the 2011 discussion is built upon in future efforts.

2012 is shaping up to be another very challenging year. As the Legislature makes tough choices on what to cut, let's commit to remind lawmakers and ourselves that those consequences are directly tied to our willingness to invest in ourselves. Proposition 103 was never intended to be the end of that discussion. It was a milestone on the journey to creating a better Colorado for everyone.

 

What's new

Search for solutions on long-term care must continue
The recent suspension of the federal CLASS Act should not mark the close of discussions about confronting the nation's long-term care needs, Colorado Center on Law and Policy Health Care Program Director Elisabeth Arenales said in a commentary posted on the Health Policy Solutions website.

"Losing the program, or even the possibility of the program, is not a victory at all. It's a great loss," Arenales wrote. "The greater loss is that we aren't even having a real conversation about whether we can fix it, or what to do instead."

Supercommittee Democrats and Republicans release deficit reduction plans
Democrats and Republicans serving on the Joint Select Committee on Deficit Reduction released plans last week to cut the nation's deficit by more than their target of $1.2 trillion. The Democratic offer, which was quickly rejected by Republicans on the committee, included less in revenue increases and more reductions in health care spending than the bipartisan plans previously released by the chairs of the Bowles-Simpson Commission or the Senate's Gang of Six. The Democrats plan, for instance, offered nearly $1 trillion less in new revenue than the Bowles-Simpson plan. The Democrats also offered more cuts to Medicare and Medicaid than the Bowles-Simpson plan. That is particularly concerning for Medicaid, where Democrats offered $75 billion in cuts, more than President Barrack Obama proposed in the deficit reduction plan he released in September. Republicans on the committee suggested even deeper cuts to the program, recommending $185 billion in reduced Medicaid spending.

The latest Democratic offer represents a large compromise, despite the proposal being viewed as unrealistic by Congressional Republicans. The proposal should not serve as a starting point for negotiations, and Democrats on the Joint Select Committee should not accept a proposal with even more drastic cuts to vital safety net programs such as Medicaid.

The Joint Select Committee must have a proposal submitted by Nov. 23. If the committee fails to achieve $1.2 trillion in savings, an automatic $1.2 trillion cut from the federal budget will kick in, split evenly between defense and nondefense spending. Democrats and Republicans on the committee were forced to send separate proposals to the Congressional Budget Office for scoring, demonstrating a continued inability to agree on the inclusion of revenue increases in a deficit reduction package.

Find coverage from Politico, and analysis of the Democratic and Republican plans from the Center on Budget and Policy Priorities.

Advancing the debate

Program helps cover medical costs for retirees not eligible for Medicare
The Early Retiree Reinsurance Program provided more than $2.7 billion in reimbursements during its first year to help cover the health costs of early retirees, according to a new study by the Government Accountability Office. The program is part of the Patient Protection and Affordable Care Act. The study examines the process for implementing the program, expenditures and how plan sponsors plan to use program reimbursements.

What you can do

Attend a community forum and share your thoughts about the health insurance exchange
Colorado residents can share what they want in a health insurance exchange at forums across the state sponsored by the Colorado Center on Law and Policy, CoPIRG Foundation (Colorado Public Interest Research Group) and the Colorado Consumer Health Initiative.

The forums will give Coloradans a chance to raise questions the Colorado Health Benefit Exchange Board should answer. Participating is an important way to ensure the exchange marketplace works.

Forums will be held through Nov. 19 in Fort Collins, Greeley, Steamboat Springs, Grand Junction, Fruita, Frisco, Breckenridge, Carbondale, Loveland, Boulder, Denver, Lakewood, Wheat Ridge, Colorado Springs, Pueblo, Gunnison, Salida, Buena Vista, Lamar, Alamosa, Durango and Montrose. For a complete list of dates and locations, and to RSVP, go to www.copirg.org/RSVP.

The Colorado Health Benefit Exchange will help consumers shop for insurance and make meaningful comparisons among plans. The goal is to increase affordability, access and coverage for individual consumers and small businesses.

Health Law and Policy Update is issued weekly by the health staff of the Colorado Center on Law and Policy. Subscribe by e-mail or read previous editions.

Health Care Director
Elisabeth Arenales  

Health Care Attorney
Adela Flores-Brennan  

Special Counsel
Ed Kahn  

Rice Fellow
Danny Rheiner

Communications Director
Perry Swanson

Released Nov. 4, 2011