Health Law and Policy Update
Headlines of the week
Governor sees opportunities for innovation in health reform
Gov. John Hickenlooper said Thursday that Colorado would move forward with implementing national health reform, noting states must address the Affordable Care Act "whether you support the new law or not." He said Colorado is "better posed than others" to move forward on health insurance exchanges, a key feature of the law designed to provide access to health insurance for the uninsured and small businesses.
Hickenlooper gave his "state of the state" address to a joint session of the Colorado General Assembly. The main focus of the speech was jobs, but Hickenlooper also mentioned health care, education, water and some other issues.
Hickenlooper's references to the need for budget balancing were troubling, particularly given the current $1 billion budget shortfall. "We don't doubt how difficult this work will be -- no one in this room took office to cut programs that (are) needed and used by some of our most vulnerable citizens," Hickenlooper said, according to his prepared remarks. Unfortunately, he did not pledge that our most vulnerable citizens would not be harmed.
The new governor's treatment of health care was largely up-beat, as he noted "opportunities for innovation and redesign of our local health care systems in ways that can both save the state money and improve the health of our citizens."
Hickenlooper noted the Hospital Provider Fee as an example of a strategy that "both improve(s) our system and reduces our financial burden." The fee, which passed during the 2009 legislative session, is helping pay for a substantial expansion of public health insurance to people with low incomes, while not reducing the general fund. His praise for the fee came the same day that two lawmakers introduced a measure to repeal at least some aspects of the fee -- House Bill 11-1025. For an analysis of HB 11-1025, see next week's edition of Health Law and Policy Update.
Health reform does not destroy jobs, research shows
Extensive research refutes recent claims by opponents of health reform challenging the economic benefits of health reform. For example, there is no justification for the assertion that health reform destroys jobs, according to an examination by the Center on Budget and Policy Priorities of the nonpartisan Congressional Budget Office's assessment of the effect of the Affordable Care Act (ACA) on labor markets. Further, the Center for American Progress finds repealing health reform would harm economic and employment growth because it would mean the loss of measures to deter premium increases, increase efficiency, reduce administrative costs and promote prevention.
In Colorado, a 2009 report found health reform would benefit the state economy and create jobs, and that each $1 of health care spending generates $2.44 in new economic impact. The report used the reform proposal from Colorado's Blue Ribbon Commission on Health Reform as a framework. While the Blue Ribbon Commission's recommendations differ somewhat from what the nation adopted with health reform, the research remains relevant. Colorado has received more than $50 million in grants under the ACA. That money is an economic benefit and also provides benefits to the state in the form of the increased capacity, research, and prevention efforts it funds.
What's new
An easy way to track health reform implementation
Anyone can follow the high points of health reform implementation in Colorado at a website maintained by the federal government.
The site notes Colorado has received $53.6 million in grant funding to implement the Affordable Care Act. The biggest portion of that total comes from $22.8 million in Therapeutic Discovery Project Program Tax Credits and Grants, which was created to "support groundbreaking biomedical research to produce new therapies, address unmet medical needs, reduce the long-term growth of health care costs and advance the goal of curing cancer within the next 30 years."
The site also notes the Affordable Care Act provided $1 million for Colorado to plan to establish a health insurance exchange in 2014. Creating a governance structure for the exchange is likely to be a hot topic at the Colorado Legislature this year. Lawmakers began their annual session Wednesday.
Extensive information about health reform implementation in Colorado is also available on the state's website.
How the Affordable Care Act improves primary care
Much of the attention on national health reform focuses on regulation of insurance companies and the 2014 requirement to buy health coverage. But the Affordable Care Act will also make primary care far more accessible by training new providers, ensuring preventive care is covered and bolstering community health centers, The Commonwealth Fund notes in a new paper. Among the findings:
- Fifty million Medicare beneficiaries in 2011 will have free access to currently covered preventive services, such as high-blood-pressure screening, alcohol misuse counseling, and colon cancer screening.
- The Affordable Care Act and the American Recovery and Reinvestment Act (the so-called stimulus package) will together support the training of more than 16,000 new primary care providers over the next five years.
- The capacity of community health centers will double, serving 15 million to 20 million more people by 2015, to help meet the demand of the newly insured.
Advancing the debate
Health care spending rose 4 percent in 2009
Health care spending nationally increased just 4 percent in 2009, the lowest annual rate in five decades, according to a report from the Centers for Medicare and Medicaid Services Office of the Actuary in this month's issue of Health Affairs. Total spending on health care in 2009 was $2.5 trillion, or $8,086 per person.
The decrease in spending is attributed to a slowdown in private health insurance spending, reduced spending on structures and equipment by private (nongovernmental) providers and slower growth in out-of-pocket spending as consumers lost jobs and health insurance and as a result had less available to spend on health care. According to the report the slowdown in growth in medical spending did not affect all sectors: spending on prescription drugs increased 5.3 percent over 2008, and spending for hospital services increased by 5.1 percent, mirroring the rate of growth in 2008, but substantially less than the trend between 1999 and 2007, which was 7.2 percent per year.
Despite the historically low rate of increase, the percentage of gross domestic product devoted in health spending increased from 16.6 percent in 2008 to 17.6 percent in 2009. That means more than one in six dollars spent in 2009 nationwide was spent on health care.
Many Americans went without medical services as a result of the recession. The Health Affairs article cites a recent survey finding 36 percent of Americans saw health professionals less often in 2009 as a result of the recession. Among those, 59 percent indicated they reduced visits to primary care physicians.
Medicaid enrollment increased by 3.5 million in 2009, and the number of people lacking health insurance increased by 3.8 million. The increase in Medicaid is attributed to the recession - as people lost jobs and health insurance they became Medicaid-eligible.
Medicaid spending increased by 9 percent in 2009, up from a from a 4.9 percent increase in 2008. That rate of increase was almost entirely attributable to a 7.4 percent increase in enrollment. Spending per enrollee increased only 1.5 percent, largely because new enrollees were mostly children and nondisabled adults, historically inexpensive groups. Federal Medicaid spending grew 22 percent, the highest rate of growth since 1991. State spending decreased 9.8 percent despite the significant rate of enrollment growth in the program due to enhanced federal dollars distributed to states' Medicaid programs through the American Recovery and Reinvestment Act.
Colorado's Medicaid rolls increased by about 12.2 percent in Federal Fiscal Year 2009, growing from 482,188 to 541,285 enrollees. Spending per enrollee during the same period decreased by 2.92 percent.
Repeal would dramatically increase federal deficit
Repealing the Affordable Care Act (ACA), as the Republican majority in the U.S. House of Representatives proposes, would increase the federal deficit by $230 billion between 2012 and 2021, according to a new estimate by the Congressional Budget Office (CBO).
That estimate was part of a CBO analysis released last week of the budgetary effects of H.R. 2, the bill to repeal national health reform. CBO analysts are cautious about projections beyond a 10-year period, but the project increase in the deficit resulting from repeal of the ACA after 2021, "would probably be somewhat larger" than one-half of 1 percent of gross domestic product, the agency said.
If health reform were repealed, the CBO projects 32 million additional Americans would be without health insurance over the 10 year period - the same number projected to get coverage under the ACA. A projected total 54 million Americans would be without health insurance in 2019.
Average costs in the individual health insurance market might be lower with repeal because policies might cover less and insurers would not have to offer coverage to people with pre-existing conditions, the CBO said. Many people in the individual market, however, would end up paying more because under the ACA the majority of enrollees would receive subsidies for the purchase of insurance, and the repeal measure would eliminate those subsidies. In addition, administrative costs might increase. Premiums for large businesses are likely to be higher under repeal because of the net impact of changes under the ACA. It is not clear what would happen to premiums for those insured through small businesses.
The Hill newspaper covers some of the political back-and-forth over the projections.
What's next
Wendell Potter headed to Denver to discuss 'Deadly Spin'
In a perfect example of what former Cigna Executive Wendell Potter calls "Deadly Spin" the health care reform repeal measure, H.R. 2, is entitled "The Job Killing Health Care Law."
Potter posted a blog this week talking about the intent of the health reform repeal effort.
"The real concern for advocates of reform should not be repeal. What we will wind up with, if the insurers' demands are met, is much worse. ... What insurers don't like are the provisions of the law that restrict their ability to shift costs to us and that require them to spend at least 80 percent of premiums on our medical care. ... And they are not at all happy that Congress finally outlawed some of their most anti-consumer practices, like dumping sick enrollees and refusing to sell insurance to people with pre-existing conditions."
Potter is the senior fellow on health care at the Center for Media and Democracy. Since leaving his job in 2008 as head of communications for Cigna, one of the nation's largest health insurers, he has been an outspoken critic of corporate public relations, and the distortion and fear manufactured by America's health insurance industry.
Potter is coming to Denver on Thursday, Jan. 20 to promote his recently released book "Deadly Spin." Details:
11 a.m. to noon
University of Colorado at Denver
P28-1303 Ed2North
Questions: 303-724-8075
7:15 p.m.
Tattered Cover Bookstore
1628 16th St.
Questions: 303-322-1965, ext. 2736
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 Jan. 13, 2011