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Health Law and Policy Update: Supreme Court will hear challenge to health reform

This week's updates

Headlines of the week

Supreme Court will hear challenge to health reform
The U.S. Supreme Court announced Monday it would hear a challenge to the Patient Protection and Affordable Care Act. The justices will consider four issues:

  • The constitutionality of the individual mandate, a provision of the law that requires most people to purchase health insurance or pay a penalty.
  • Whether an expansion of Medicaid in the law is a valid exercise of Congress' spending authority.
  • Whether the challenge can be heard before the individual mandate takes effect in 2014.
  • Whether some parts of the act can be upheld even if other parts are ruled unconstitutional.

Colorado Center on Law and Policy Health Care Attorney Adela Flores-Brennan issued a statement on the court's decision. Kaiser Health News compiled a roundup of coverage.

Lawsuit challenges HealthONE hospital transaction
Nine former directors and members of medical staff of the Colorado Health Foundation and HealthONE filed suit Monday in Denver District Court challenging the Colorado attorney general's approval of the sale of the foundation's interest in the HealthONE joint venture hospital system. Details of the lawsuit are in the plaintiffs' court filing.

Attorney General John Suthers recently approved the sale but ruled it was not subject to the Colorado Hospital Transfer Act. The challengers counter that the transaction was subject to the act, and that even if not, Suthers failed to require the continuation of the foundation's role in the oversight and control of HealthONE's operations. Suthers has 30 days to respond. If the matter goes to trial, it might take a year or two to be determined at the district court level.

Suthers is confident his decision will hold up, a spokesman for the Attorney General's Office told The Denver Post. The Colorado Center on Law and Policy favored the transaction, provided certain changes were made to protect the public interest. Suthers' ruling to approve the deal incorporated most of CCLP's recommendations.

Number of uninsured Coloradans climbs 22 percent in two years
Colorado's weak economy contributed to a 22 percent increase in the number of residents lacking health insurance during the past two years, according to a new survey by the Colorado Trust and the Colorado Health Institute. The survey estimates the number of uninsured Coloradans is 829,000, an increase of 151,000 since a similar survey was taken in 2008-09.

The report attributes the increase to higher unemployment and rising health care costs. Unemployment rose from close to 7 percent during the 2008-09 survey period to nearly 9 percent when the data for the 2011 survey was collected. That caused a significant number of Coloradans to lose employer-based health insurance. The cost of health care premiums also rose substantially during the period, while average family income dropped by almost 10 percent. Those changes made the cost of health insurance an even greater burden for many Colorado families.

Another important finding was rising Medicaid enrollment. In 2011, 8 percent of Coloradans were enrolled in Medicaid, compared to 6 percent in 2009. That demonstrates the safety-net in Colorado has been effective, offering coverage to many who lost employer-based health insurance during the recession.

Find details in news coverage from The Denver Post, I-News Network and Health Policy Solutions.

Families bear the burden of rising health care costs, new data show
Average employer-sponsored health insurance premiums in Colorado rose 27 percent for singles and 41 percent for families from 2003 to 2010, according to an analysis by The Commonwealth Fund released Thursday. The national average increase during that time was 42 percent for singles and 50 percent for families.

Premium growth outpaced income growth in Colorado, causing health care premiums to make up a greater share of household income. Premiums for single people rose from 13.2 percent of median income for single-person households in 2003 to 16.4 percent in 2010. Family premiums rose from 14.5 percent of median income for a family household in 2003 to 16.6 percent in 2010.

The average share of premiums paid by employees in Colorado also increased. The average annual employee premium share increased by 52 percent for singles and 49 percent for families from 2003 to 2010. That increase, along with an increase in average deductible, transferred a greater portion of rising health care costs to Colorado families. The average deductible in Colorado increased by 124 percent for singles and 104 percent for families between 2003 and 2010.

The Commonwealth Fund's report highlights the importance of the cost-saving measures included in the Patient Protection and Affordable Care Act, and additional state actions to improve value in health care. According to the report, if the annual rate of growth for private insurance premiums nationwide can be reduced by 1 percentage point, families would save an average of $2,161 annually in 2020, compared to what they will pay if the growth rates of the past seven years continue.

Join CCLP's Health Care Program on Twitter
Follow the latest developments in health care law and policy with the Colorado Center on Law and Policy Health Care Program's new Twitter account, @CCLPJustHealth.

Advancing the debate

Economist explains adverse selection and the individual mandate
Economist Mark Thoma provides a useful explanation of the mandate that most individuals purchase health insurance in a commentary posted on the CBS News website.

"In the past, the broad-based pools needed to make insurance work were obtained through a large tax break to induce firms to provide insurance to their employees, combined with a requirement that if the insurance is offered, it must be available to all employees," Thoma writes. "But the steady erosion in the employer-based system is one of the motivations for reforming the health care system."

Federal Medicaid spending would increase to cushion future downturns under proposal
Federal spending on Medicaid would increase automatically during a national economic downturn under a proposal the Government Accountability Office examines in a new study. An increased federal share of Medicaid funding would help states maintain their programs when a recession results in declining state revenues and increasing Medicaid enrollment, the GAO said.

The federal government increased its Federal Medical Assistance Percentage (FMAP) to help fund state Medicaid programs from October 2008 through December 2010, a part of the American Recovery and Reinvestment Act 2009. The Recovery Act directed the GAO to recommend changes to the FMAP formula to make it responsive to future economic downturns.

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. 18, 2011