Measures in Missouri, Oklahoma, Arizona (constitutional) and Georgia contain nearly identical language — all copies of model language promoted by the American Legislative Exchange Council (ALEC).4 The remaining measures range in ambition, scope, approach and legal purview, from Utah’s mild Health System Amendments to Louisiana’s curious coupling of unequivocal objection to the individual mandate with a proviso denying any conflict with the Affordable Care Act. Yet common elements emerge across all nine measures, with Colorado’s Amendment 63 consistently tacking to the extreme of the group.
Every law or proposed constitutional amendment contains language opposing the individual mandate put in place by the Affordable Care Act. (Figure 2) The mandate, which goes into effect in 2014,5 stipulates that virtually every individual must have health insurance or face a fine.6 Missouri’s language is typical, declaring, “No law or rule shall compel, directly or indirectly, any person, employer, or health care provider to participate in any health care system.”7
In Colorado, Amendment 63’s language is similar, but characteristically broader than the norm, stating, “no statute, regulation, resolution, or policy adopted or enforced by the state of Colorado, its departments and agencies, independently or at the instance of the United States shall: Require any person directly or indirectly to participate in any public or private health insurance plan, health coverage plan, health benefit plan, or similar plan….”8
Another prominent element of many anti-health reform measures, including Colorado’s, is the explicit protection of direct payment for health care services. Direct payment means individuals pay providers directly rather than participating in any plan, whether public or private, that pays medical expenses.9 Notably, while the Affordable Care Act requires all individuals to enroll in some kind of health insurance plan or face a federal fine, individuals are in no way barred from paying their providers directly nor are health care providers barred from receiving direct payment for services.
Measures in Missouri, Oklahoma, Arizona (constitutional and statutory), Georgia, Idaho and Colorado contain explicit protections of direct payment. (Figure 2) Typical language states, “A person or employer may pay directly for lawful health care services and shall not be required to pay penalties or fines for paying directly … A health care provider may accept direct payment for lawful health care services and shall not be required to pay penalties or fines for accepting direct payment from a person or employer.”10
Colorado’s Amendment 63 employs the same broad scope to protect direct payment as it does in repudiating the individual mandate: “No statute, regulation, resolution, or policy adopted or enforced by the state of Colorado, its departments and agencies, independently or at the instance of the United States shall: … Deny, restrict, or penalize the right or ability of any person to make or receive direct payments for lawful health care services.” 11
Penalties or fines
All the measures contain objections to penalties — whether used to enforce the individual mandate or to impede direct payment. Measures vary with respect to which policy they associate penalties with and which level of government is banned from imposing a fine.12 The Virginia Health Care Freedom Act provides the simplest example of opposition to penalties disallowing, “any penalty, assessment, fee, or fine as a result of … failure to procure or obtain health insurance.”13 (Figure 2) The relevant language for ALEC-based measures and for Colorado’s Amendment 63 is discussed in the direct payment section above.
Right to health care choice
A majority of the anti-health reform measures, including Colorado’s, also mention a right to freedom of health care choice. Seven measures, not including Amendment 63, mention some kind of individual right to health care choice in a limited way. (Figure 2) These either mention a right to heath care choice in passing, as a kind of preamble to substantive declarations: “To preserve the freedom of citizens of this state to provide for their health care,” or only in the context of an individual’s selection of a mode of securing health care services: “…every person within the state of Idaho is and shall be free to choose or decline to choose any mode of securing health care services without penalty….”14
Colorado’s proposed Amendment 63 stands apart as the only measure to explicitly enumerate a broad right to health care choice, rather than to simply reference the right in passing or in a very limited form. The measure declares, “All persons shall have the right to health care choice....”15 That unique and extraordinarily broad enumeration of the right to health care choice is amplified by the right’s prominence and ambiguity. The right is not defined in any way, and if approved by voters, it would be set in the state constitution.
Ambiguity seems to be a part of Amendment 63’s design. As a result the effects of the measure on health care in Colorado today and in the future are uncertain. In explaining the provision at a hearing before the Title Setting Board, Amendment 63 proponent Jon Caldara explained, “I cannot tell you how future courts will interpret that right to health care choice,” “…we have taken two aspects of that and clarified. That doesn’t mean there are no other rights to health care choice. It means those other rights will be left for interpretation by the courts….” 16
Many of the measures include provisos which limit their impacts by shielding areas of existing law from the effects of measures’ new language. Common areas protected include health services permitted or required by law; workers compensation; the existing rules, terms and conditions of the health care system; and state laws beyond those aspects explicitly mentioned in the measures. (Figure 2)
An important proviso present in almost every other state anti-health reform measure but conspicuously absent in Colorado’s is an explicit protection of the third-party payer system. (Figure 2) For instance, Virginia’s statute includes the following language: “Nothing herein shall impair the rights of persons to privately contract for health insurance for family members or former family members.” Idaho’s states, “The policy stated herein shall not be applied to impair any right of contract related to the provision of health care services to any person or group.” Arizona (constitutional), Missouri, Oklahoma and Georgia limit the scope of ballot or statutory language as follows: “[S]ubject to reasonable and necessary rules that do not substantially limit a person’s options, the purchase or sale of health insurance in private health care systems shall not be prohibited by law or rule (or regulation).”17
Other more idiosyncratic limitations exempt persons voluntarily applying for Medicaid and Children’s Health Insurance Programs (Virginia, Utah); preserve the ability of programs and institutions of higher education to require participation in a health insurance plan as a condition of enrollment (Virginia); preserve the authority of the courts and the Department of Social Services to order the purchase of health insurance (Virginia); and preserve state authority over income taxation (Georgia). (Figure 2)
In contrast, Amendment 63 contains only a protection of emergency medical treatment required by law and of health benefits provided by workers’ compensation programs or similar insurance. As such, it leaves ambiguous its effects on public insurance programs, the ability of a court to require a divorcing parent to purchase health insurance for his or her children, on the third-party payer system, and on existing health care laws and polices generally.
Definitions also help clarify and limit the scope of the measures’ language. Common terms defined by states include “health care services” and “penalty.” (Figure 2) While Amendment 63 contains some of the broadest language, it contains only one definition — of ‘lawful health care services.’
None of the intended effect
Despite the rhetoric surrounding the nine measures passed or pending voter approval, state attempts to override federal law will have no force or effect. And while the states might conceivably attempt to block the implementation of an individual mandate and related fines at the state level, in this case such efforts have no standing to succeed. That is because the mandate is entirely a federal affair18 and the Supremacy Clause of the U.S. Constitution requires states to comply with federal law if constitutional.19 If the Affordable Care Act’s mandate is to be overturned, it will be done via states’ federal lawsuits challenging its constitutionality. Colorado’s Attorney General, John Suthers, has joined one of those lawsuits.20
Lack of force with regard to the individual mandate notwithstanding, however, the measures have substantial sway in other areas of state health policy.
Troubling consequences in Colorado
While the anti-health reform measures likely will not have their advertised effect, they may have problematic impacts on current and future state health care systems. The impacts have little to do with the federal individual mandate or direct payment concerns at the heart of state anti-health reform measures.
In Colorado, many of the issues stem from the unbridled nature of Amendment 63. Also prominent is Amendment 63’s unique constellation of elements, reasonable and necessary rules that do not substantially limit a person’s options, the purchase or sale of health insurance in private health care systems shall not be prohibited by law or rule (or regulation).”17
Limits on Colorado’s ability to reform health care
One certain effect of Amendment 63 would be an outright prohibition on any state-based individual health insurance mandate or any other system which required the purchase of health insurance or participation in a health plan. Without that set of tools, Colorado would be unable to adopt or implement a Colorado health reform plan similar to that recommended, for example, by the bi-partisan Colorado Blue Ribbon Commission on Health Care Reform. The Blue Ribbon Commission recommended that Colorado adopt an individual mandate and reform the insurance market place to ensure coverage for people with pre-existing conditions.21 A prohibition against ever moving in this direction would severely limit the options for health reform in Colorado in the event the Affordable Care Act, or at least the individual mandate provisions of the Act are determined unconstitutional.
Consumer protection issues
Potential problems arise from language in Amendment 63 protecting the right of “any person” to receive direct payment for providing lawful health care services. Perhaps most concerning, the exercise of that right might interfere with the state’s ability to regulate the practice of medicine. For example, if doctors have a constitutional right to receive payment, the state might not be able to limit the scope of practice of medicine. Indeed it is largely impossible to predict the impact Amendment 63 might have on the state’s ability to license, discipline or supervise doctors and other medical practitioners.
Second, a constitutional right to receive payment for medical services might interfere with the ability of the Legislature to prohibit medical providers from “balance billing,” a practice where certain medical providers charge more than an insurance company pays for a covered visit or procedure and bills the patient for the difference. Colorado law currently prohibits the practice.22 Should Amendment 63 pass, the constitutional right to receive payment for services might override that prohibition. Again, the problems are a product of Amendment 63’s combination of powerful language and a lack of definitions, limitations and preservation of relevant current law that measures in other states include.
Health Insurance in Colorado
Yet another undefined and unknown potential consequence of Amendment 63 stems from its failure to provide explicit protection of the right to purchase or privately contract for health insurance. (Figure 2) Amendment 63’s emphasis on and protection of direct payment relationships ought not to preclude a person or employer from entering into a contract with a health plan. However, the fact that almost every other state drafting similar language explicitly protected the ability of persons to participate in health insurance raises questions about the potential effect of Amendment 63.
Finally, Amendment 63’s language prohibiting the state from requiring, “any person directly or indirectly to participate in any public or private health insurance plan, health coverage plan, health benefit plan, or similar plan,” might prohibit state institutions of higher learning from requiring students to have health insurance coverage. The potential for such an effect is underscored by an explicit protection of this practice in Virginia’s statute.
Operation of existing public health insurance programs
Measures in Virginia and Utah protect their states’ Medicaid and Child Health Insurance Programs from the application of their anti-health reform statutes. While it is impossible to predict what impact Amendment 63 might have on Medicaid and Child Health Plan Plus (CHP+) enrollees in Colorado, at a minimum it appears the amendment would prohibit the state from automatically enrolling participants in those programs with a health insurance company, health benefit plan or similar plan. (See Amendment 63 language prohibiting “the state of Colorado, its departments and agencies” from requiring “any person directly or indirectly to participate in any public or private health insurance plan, health coverage plan, health benefit plan, or similar plan.”) Both Colorado Medicaid and CHP+ currently automatically enroll some participants in a health plan at least temporarily, and the state intends to automatically enroll some Medicaid participants in Accountable Care Collaboratives in the future in order to more effectively manage their care. Thus Amendment 63 may impede the operation of programs which, combined, currently provide health care to some 600,00023 low-income residents and children in Colorado.
Reorienting health care
The core components of Amendment 63 are an attack on the individual mandate, a protection of direct payment and a broadly-stated right to health care choice. These elements are forged with an unusual lack of clarifying definitions or limiting provisos. Ensconced in the state constitution, they work together to move Colorado closer toward a health care system where the market operates in an unregulated environment. In this system, medicine is without government oversight; the default is to pay out-of-pocket rather than secure health insurance; vulnerable populations such as the elderly and poor have fewer health care options; and individuals with pre-existing conditions are unable to access affordable care. Coloradans ought to weigh Amendment 63’s approach to health care, as well as its potential unintended consequences as they consider the measure.
Contact: Alec Harris
303-573-5669, ext. 316
Released Sept. 27, 2010
A shorter version of this publication was released Oct. 4, 2010.
Appendix: Prominent components of active anti-health reform measures
FULL TEXT OF AMENDMENT 63
Be it enacted by the People of the State of Colorado
Article II of the Constitution of the State of Colorado is amended by the addition of a new section to read:
Section 32. Right to health care choice.
(1) All persons shall have the right to health care choice. No statute, regulation, resolution, or policy adopted or enforced by the State of Colorado, its departments and agencies, independently or at the instance of the United States shall:
(a) require any person directly or indirectly to participate in any public or private health insurance plan, health coverage plan, health benefit plan, or similar plan; or
(b) deny, restrict, or penalize the right or ability of any person to make or receive direct payments for lawful health care services.
(2) This section shall not apply to, affect, or prohibit: (A) emergency medical treatment required by law to be provided or performed by hospitals, health facilities, or other health care providers; or (B) health benefits provided in connection with workers’ compensation or similar insurance.
(3) “Lawful health care services” means any service or treatment permitted or not prohibited by any provision of Colorado law.
(4) This section is intended to reflect and affirm the powers reserved to the state by U.S. Const., amend. X, and to implement the powers reserved to the people by section 1 of article V of this Constitution.
(5) This section shall become effective upon proclamation by the Governor, shall be self implementing in all respects, and shall supersede any provision to the contrary in the Constitution of the State of Colorado or any other provision of law.
(6) If any provision of this section or the application thereof to any person, entity, or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application, and to this end the provisions of this section are declared severable.
Amendment 63, (Colo. 2010), proposed citizens’ initiative
1 This analysis will cover only “active” measures. That is, measures which have passed or are pending voter approval, not including non-binding resolutions. For a full account of all anti-health reform measures in the nation, see: Cauchi, Richard, “State Legislation Challenging Certain Health Reforms; 2010,” National Conference of State Legislatures, Sept. 3, 2010. http://www.ncsl.org/?tabid=18906
2 Formally Initiative 45, Amendment 63 was certified for Colorado’s November ballot on Aug. 26, 2010.
3 Exceptions apply to those demonstrating financial hardship, religious objections, and to American Indians, and people who have been uninsured for less than three months. Financial exceptions apply to those for whom the lowest cost health plan exceeds 8% of, income; and to those with income below the tax filing threshold ($9,350 for an individual and $18,700 for a married couple in 2009). (“Summary of Coverage Provisions in the Patient Protection and Affordable Care Act, Kaiser Family Foundation: Focus on Health Reform, April 28, 2010. http://www.kff.org/healthreform/upload/8023-R.pdf)
4 For more information, see “Freedom of Choice in Health Care Act” section of the ALEC website (http://www.ALEC.org/)
5 “Provisions of the Affordable Care Act, by Year,” U.S. Department of Health and Human Services: HealthCare.gov, Aug. 9, 2010. http://www.healthcare.gov/law/about/legislation/order/byyear.html#2015
6 Individuals whose income is less than 133 percent of the Federal Poverty Level ($14,404 annually for an individual) will be eligible for Medicaid. Families with incomes of less than 400 percent FPL ($88,200 annually for a family of four) will be eligible for federal subsidies. (“Summary of the New Health Reform Law, Kaiser Health Foundation: Focus on Health Reform, March 26, 2010. http://www.kff.org/healthreform/upload/8061.pdf) Outright exemptions to the mandate also apply (see note iii). The mandate is key to the expanded coverage of children, individuals with pre-existing conditions and others included in health reform. Without including all individuals — healthy and sick — in the insurance pool, expanded coverage to vulnerable populations becomes prohibitively expensive. (Spillane, Shannon, “Key Health Insurance Market Reforms Not Achievable Without an Individual Mandate,” Center on Budget and Policy Priorities,” May 4, 2010. http://www.cbpp.org/files/4-7-10health.pdf)
7 H.B. 1764, 95th Gen. Assem., Reg. Sess. (Mo. 2010), enacted.
8 Amendment 63, (Colo. 2010), proposed citizens’ initiative.
9 Public health insurance includes Medicare and Medicaid and would include a single-payer system. A private health insurance plan includes Health Maintenance Organizations (HMO’s) or Preferred Provider Organizations (PPO’s) and other types of insurance plans.
10 H.C.R. 2010, 49th Leg., 1st Reg. Sess., (Ariz. 2009), referred to ballot as Proposition 106.
11 Amendment 63, (Colo. 2010), proposed citizens’ initiative.
12 The ALEC measures (Arizona [constitutional], Georgia, Oklahoma and Missouri) and Colorado object to penalties with respect to direct payment. Measures in Louisiana, Utah, and Virginia object to penalties enforcing the individual mandate. Idaho’s Health Freedom Act and Arizona’s statutory measure object to fines in the context of both direct payment and the individual mandate.
Colorado bans fees by any state entity. The ALEC measures along with Virginia’s Health Care Freedom Act, and Arizona’s statutory measure do not specify a level of government or specify more than one level in their objection to fees. Idaho’s Health Freedom Act and Utah’s Health System Amendments prohibit penalty by the federal government. Louisiana’s Health Care Freedom Act prohibits penalties in choosing health insurance generally and bars the state from imposing a penalty to enforce the mandate explicitly.
13 VA. CODE ANN. § 38.2-3430.1:1 (Michie 2010)
14 S.B. 411, 2010 Leg., Reg. Sess. (Ga. 2010), enacted; and IDAHO CODE § 39-90.
15 Amendment 63, (Colo. 2010), proposed citizens’ initiative.
16 Initiative Title Setting Review Board: 2009-2010 #45 – “Health Care Choice,” Colorado Secretary of State’s Blue Spruce Conference Room, April 7, 2010. Transcription by Colorado Secretary of State.
17 VA. CODE ANN. § 38.2-3430.1:1 (Michie 2010); IDAHO CODE § 39-90; H.C.R. 2010, 49th Leg., 1st Reg. Sess., (Ariz. 2009), referred to ballot as Proposition 106.; H.B. 1764, 95th Gen. Assem., Reg. Sess. (Mo. 2010), enacted.; S.J.R. 59, 52nd Leg., (Ok. 2010), referred to ballot as State Question Number 756.; S.B. 411, 2010 Leg., Reg. Sess. (Ga. 2010), enacted.
18 The federal Department of Health and Human Services (HHS) collects insurance enrollment information, serves notice of penalties, and determines exemptions; the U.S. Department of Treasury serves notice of non-enrollment; and the Internal Revenue Service collects any potential fines. Specifically, employers and other providers of health care make enrollment reports to HHS, not to a state. [ACA, § 1502(a); see 26 U.S.C. § 6055.] A person who appears not to have enrolled gets a “notice of non-enrollment,” but that comes from the U.S. Department of Treasury, not from a state. [ACA, § 1502(c).] The “shared responsibility payment” penalty is a payment to the federal government to be included with a person’s federal tax return. [ACA, § 1501; see 26 U.S.C. § 5000A(b)(2).] The secretary of HHS, not a state, serves notice of the penalty. [§ 5000A(g)(1).] The procedure for collecting the penalty, and for defending against collection, is the same general procedure as federal tax procedure. [Id..] The restrictions on criminal prosecution and on liens and levies are restrictions on federal tax enforcement procedures, not on state activities. [§§ 5000A(g)(2)(A) and (B).] Whether or not someone gets a hardship exemption is to be determined by HHS, not by a state. [§ 5000A(e)(5).] (Analysis courtesy of the Disability Law Center of Alaska, July 15, 2010.)
19 The text of the Supremacy Clause: This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any state to the Contrary notwithstanding.
20 State of Florida et al v. United States Department of Health and Human Services et al.
21 The final report of the Blue Ribbon Commission can be found at: http://www.colorado.gov/cs/Satellite/BlueRibbon/RIBB/1207055681539
22 C.R.S. §10-16-704(3)
23 In July 2010, combined Medicaid and CHP+ enrollment in Colorado totaled 607,224. (“Premiums, Expenditure, and Caseload Report,” Colorado Department of Health Care Policy and Financing, July 2010)