Health Law and Policy Update
Headlines of the week
HHS approves Colorado's waiver for hospital provider fee
Last week the Centers for Medicare and Medicaid Services (CMS) gave Colorado permission to implement the Hospital Provider Fee established by Colorado House Bill 09-1293.
The fee represents one of the biggest new mechanisms in recent history to access to affordable health care for all Coloradans. It will enable the state to extend Medicaid eligibility, starting May 1, to more than 100,000 additional Colorado citizens and lawful residents, and simultaneously give hospitals a financial boost by decreasing substantially the amount of uncompensated care they provide.
Assessing hospitals the "provider fee" will yield an estimated $600 million annually statewide. The federal government will match that money, giving Colorado $1.2 billion each year to expand health access to people with low incomes and cut hospitals' uncompensated care.
Additional expansions, to be accomplished by 2012, include for the first time making low-income, childless adults eligible for Medicaid, implementing a program that allows disabled adults at higher income levels to buy in to Medicaid, and streamlining Medicaid enrollment so it is easier for eligible people to receive continuous care.
Check the Center on Law and Policy's news release for an accounting of the net gain or loss to each participating hospital statewide.
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.
High Risk Pools must be in place within 90 days
High risk pools will ensure people locked out of the insurance market today because they have health conditions can access coverage until 2014, when most of the bill's major provisions including health insurance market reforms take effect. States can choose to operate their own high risk pools under an agreement with the Department of Health and Human Services (HHS), or HHS can operate pools or hire a nonprofit agency to run them for states that do not want to conform to new federal requirements.
States must commit to maintain current levels of funding for existing high risk pools in order to qualify. A total of $5 billion was set aside for states; that amount is expected to be allocated based on state population and costs - a method similar to that used today to allocate Children's Health Insurance Program funds. HHS Secretary Kathleen Sebelius sent letters to governors and state insurance commissioners Friday asking whether they wanted to participate in the new program. States must submit letters of intent by April 30.
While Sebelius must do a lot of work quickly to establish the requirements for these high risk pools, the basics are as follows: The pools will be in effect until Jan. 1, 2014, when the establishment of exchanges, affordability subsidies and insurance market reforms will mean high-risk people will have equal access to the insurance marketplace. To gain entry, people must have pre-existing conditions and have been without creditable coverage for six months (this is called a crowd-out provision and is designed to keep people from dropping coverage to get into the high-risk pool). Rates must mirror those in the private marketplace and age bands are limited to 4:1. An example of what this means: Someone 64 years old cannot be charged more than four times someone who is 24. There is a minimum level of coverage that must be offered in the pool. Out of pocket costs (beyond premiums) cannot exceed HSA limits - $5,950 a year for an individual or $11,900 for a family.
Of course, the federal government will have to establish rules to clarify how high risk pools work.
Many states already have high risk pools in place. Colorado's is Cover Colorado.
Some issues to consider:
- Will Colorado design its own high-risk pool or let the federal government take over this responsibility?
- What opportunities will there be for stakeholder involvement in decision making about the structure of Colorado's high-risk pool?
- Cover Colorado accepts people who have qualifying conditions or who have been denied an individual insurance policy. There is a six-month pre-existing condition exclusion. The new pool requires people to have a pre-existing condition and have been without "creditable coverage" for six months. Depending on federal regulations yet to be issued, people in Cover Colorado today may not benefit from this new high risk pool unless federal regulations grandfather them in.
Reform not fast enough for parents of young adults
One provision of health reform scheduled for implementation this year is the requirement that insurers offer coverage to young adults, up to age 26, on their parent's policies. This will have a significant effect even in states like Colorado that already have similar state requirements because most people are covered through large, self-insured plans regulated by the federal government. According to the U.S. House Committee on Energy and Commerce, an estimated 414,000 young adults in Colorado will be eligible for coverage under this provision.
From Kaiser Health News: Young adults make up one of the biggest groups of the uninsured. Forty-five percent of those between the ages of 19 and 29 were uninsured for at least part of 2009, according to a Commonwealth Fund survey last summer of 2,002 young adults. This figure is significantly higher than the 30 percent rate reported for 2008 by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured, and may be a result of the continuing economic downturn. (Kaiser Health News is part of the foundation.)
It will take until Sept. 23, 2010, to adopt regulations and implement this provision, and that's too long a wait, complain some parents of children graduating from college.
Who's doing what
Ritter offers Holder help in defending health reform
Governor Ritter joined Governors Edward Rendell of Pennsylvania, Chris Gregoire of Washington and Jennifer Granholm of Michigan in a March 26 letter to U.S. Attorney General Eric Holder offering assistance in defending against legal challenges to federal health reform. Colorado Attorney General John Suthers is one of 14 state attorneys general to join the anti-reform litigation.
The Colorado Center on Law and Policy Health Program Director Elisabeth Arenales appeared on KRMA-TV's "Colorado State of Mind" with Suthers on Friday to discuss the lawsuit.
Advancing the debate
Colorado House Bill 10-1160 will be voted on in the Senate Business Affairs and Technology Committee on April 14. Check the Colorado Center on Law and Policy's Web site on Thursday for a detailed Issue Brief examining problems with the policy.
What you can do
Oppose House Bill 10-1160
Call your state senator and tell 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 Care Director
Health Care Attorney
Released April 7, 2010