Health Law and Policy Update
Headlines of the week
Federal judge intends to fast-track anti-reform litigation
U.S. District Court Judge Roger Vinson said in a hearing on Wednesday on the lawsuit challenging the constitutionality of health reform that he intends to move the suit forward as quickly as possible. Colorado Attorney General John Suthers joined the litigation filed by Florida's attorney general and joined by 17 other mostly Republican State attorneys general.
The Department of Justice (DOJ) attorney representing the United States said DOJ intends to file a motion to dismiss the suit. Judge Vinson set a Sept. 14 hearing on that motion and said his priority is ensuring the process is both speedy and inexpensive for taxpayers.
Colorado Gov. Bill Ritter offered help to the Department of Justice in defending the legality of health reform in a March 26 letter to U.S. Attorney General Eric Holder. The letter from four governors including Ritter says: "We are ready to offer you any help you many need and we will stand by your efforts to protect this most historic improvement of health care for every citizen of this nation."
Colorado Legislature passes bill to add to the numbers of uninsured
In a move contrary to the large-scale state and national efforts to cover the uninsured, the Colorado General Assembly last Friday passed a bill that is predicted to cut more than 2,000 elderly legal immigrants off of Old Age Pension financial and health benefits. The move creates a pool of newly uninsured Colorado residents.
House Bill 10-1384 is widely touted as a bill that will bring Colorado into compliance with federal immigration requirements and require immigrant sponsors to live up to their commitments, but there are two very important facts to keep in mind:
Colorado was never out of compliance with federal law.
The sponsor obligation piece of the bill can't be implemented until after 2014.
The immediate savings in the bill -- more than $13 million -- comes from a new requirement that legal immigrants wait five years before applying for Old Age Pension. This new requirement applies to elderly immigrants currently receiving Old Age Pension benefits, terminating them from the program and requiring them to wait out the remainder of their five years. Hopefully, financial hardship exceptions added to the bill will help mitigate the harmful effects of these changes. This bill has not yet been signed by the governor.
A fact sheet produced by the Colorado Center on Law and Policy lays out the details.
Who's doing what
Senate moving on COBRA vote
Federal COBRA ensures workers have access to health insurance for 18 months after the loss of a job. The problem is the cost for a COBRA policy is 102 percent of the premium a worker paid before losing his or her job. Most workers are heavily subsidized by their employers and cannot afford insurance once they lose the employer contribution.
As part of the stimulus package in February 2009, Congress made people who had lost their jobs after September 2008 eligible for a two-thirds federal subsidy for the purchase of insurance through COBRA. That benefit later was extended through March 2010, and further extension is under consideration in HR 4851, the Continuing Extension Act of 2010, which would provide a short-term extension of COBRA and other jobless benefits beginning April 1, 2010. Just before spring recess, Sen. Tom Coburn, R-Okla., placed a hold on the bill. On Monday, four Republicans voted with Democrats to defeat a filibuster and clear the way for the Senate to take up the bill later this week. Even if the short-term benefits extension passes, there remains the larger issue of paying for of longer term supports.
What's next
We'll take a look in this section over the next few weeks at what provisions of national health reform will be implemented this year as well as opportunities for states going forward.
Early adopters: Opportunities for Medicaid expansion
Medicaid today is a patchwork program that covers children in low-income families, parents of Medicaid-eligible children, the elderly and people with disabilities. Under federal health reform, Medicaid will expand eligibility by 2014 to cover all U.S. citizens and legal immigrants whose annual incomes are less than 133 percent of the federal poverty level (about $29,000 annual income for a family of four) without regard to whether they fit into a specific eligibility category.
That means most adults without Medicaid-eligible children are not eligible for Medicaid today but will be eligible under reform. Most states cover parents of Medicaid-eligible children at much lower eligibility levels -- this is a substantial expansion for them. Many states, including Colorado, cover children older than 6 only up to 100 percent of federal poverty - this is an expansion for them as well.
Between now and 2014, when the Medicaid expansion will be complete, states can begin an immediate Medicaid phase-in for "the lowest-income adults in their states, without regard to disability, parental status or most other categorical limitations." (Centers for Medicare and Medicaid Services State Medicaid Director Letter #10-005). The intent of the early-implementation provision is to allow states to begin to fill the gaps in Medicaid eligibility that are created by the existing mandatory categories. States may fully or partially implement expansions for adults up to 133 percent of poverty who do not fit into existing eligibility categories. States that take advantage of this opportunity will receive federal matching dollars for covering these individuals at the state's current match rate - 50 cents of every dollar spent in Colorado. In 2014, most states, including Colorado, will receive 100 percent federal funding to cover adults who currently do not fit into an established Medicaid category as well as other populations newly eligible for Medicaid. That match will be phased down until 2020, when states will get 90 cents on the dollar for newly eligible populations. States will need guidance and clarification from the federal Centers for Medicare and Medicaid Services about how the early implementation option will work and to whom it will apply.
Colorado already has planned expansions thanks to passage of the hospital provider fee, House Bill 09-1293. However, the early-implementation option may allow for a smoother transition for some Colorado beneficiaries, the opportunity to cover certain discrete groups earlier than previously planned, or the opportunity to draw down federal matching dollars for newly eligible populations, including certain state-funded populations. The following are eligibility expansions to Colorado's Medicaid and CHP+ programs made possible by the hospital provider fee which help lay the groundwork for federal health reform:
May 1, 2010 -- Parents of Medicaid-eligible children will be covered up to 100 percent of federal poverty, or $22,050 for a family of four.
May 1, 2010 -- Children and pregnant women in CHP+ up to 250 percent of federal poverty or $55,125 for a family of four.
2011 -- Medicaid buy-in for people with disabilities up to 400 percent of federal poverty.
2012 -- Adults without dependent children up to 100 percent of federal poverty or $10,830 for one person. This population is not eligible for Medicaid today.
Colorado is well-positioned by these expansions to draw down federal matching dollars before 2014. The question for advocates is whether this provides opportunities to include populations other than those already planned for under the provider fee expansions.
Advancing the debate
Risky 'wellness' bill clears Senate committee
Colorado House Bill 10-1160 cleared the Senate Business Affairs and Technology Committee on Wednesday on a 5-2 vote. The Colorado Center on Law and Policy produced a fact sheet explaining why legislators should reject the bill.
A recent article in The New York Times addressed similar provisions in the federal law: "Though the law promises to end discrimination in coverage based on health status, [Washington and Lee University law professor Timothy Stoltzfus] Jost called the wellness provisions 'a loophole big enough to drive a semi through,' adding, 'Insurers know darn well this will allow them to continue to underwrite based on health status.' Many consumer advocates worry that premiums will be raised significantly across the board first, and then individual discounts will be applied."
What you can do
Oppose House Bill 10-1160
Call your state senator and ask him or her to vote no on House Bill 10-1160. Don't know who your senator is? Find out at Project Vote Smart.
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
Communications Director
Perry Swanson
Released April 14, 2010