Health Law and Policy Update
Headlines of the week
Slow benefits processing still hurting Colorado's needy families
Long processing delays are still creating hardship for people waiting to receive critical public benefits including Medicaid and food stamps, The Denver Post reported Sunday.
The story featured interviews with the Colorado Center on Law and Policy's Ed Kahn and Adela Flores-Brennan, the lead attorneys in the agency's legal action to compel the state to process benefits in the time required by law. In large part, the delays are caused by the Colorado Benefits Management System, computer software that's been plagued with problems ever since the state introduced it in 2004.
Symbolic repeal vote a needless distraction
The U.S. House of Representatives passed a bill on a 254 to 189 vote to repeal health reform last week. The Senate is unlikely to hold a similar vote, and the repeal vote in the House has been described as symbolic. The Congressional Budget Office estimated that the cost of repeal would be $230 billion.
President Obama talked about the benefits of the Affordable Care Act (ACA) in the State of the Union address this week, saying "... instead of refighting the battles of the last two years, let's fix what needs fixing and move forward." He referred specifically to fixing an unpopular requirement in the ACA that businesses file 1099s for any cumulative expenditure to any one business of more than $600. He also indicated a willingness to work toward malpractice reform.
Committees in the House are now working on drafting health reform alternatives, and the House will proceed to look for ways to undermine the new law by restricting or eliminating funding. Healthcare.gov posted an analysis of the effect of health reform repeal on Colorado.
Health and Human Services Secretary Kathleen Sebelius testified before the Senate Health Education Labor and Pensions Committee on Thursday, where she explained some of the benefits of the ACA and fielded questions about the potential for medical malpractice reform. The ACA already provides $50 million in demonstration grant funding to work toward malpractice reform.
Arizona requests exemption from Medicaid Maintenance of Effort requirement
Arizona Gov. Janice Brewer sent a letter to Health and Human Services Secretary Kathleen Sebelius this week seeking permission to eliminate Medicaid eligibility for 280,000 individuals effective Oct. 1. The ACA includes a Maintenance of Effort requirement for states - they may not reduce eligibility for Medicaid-covered adults until 2014. Brewer's letter said approval of her request would effect childless adults and parents. Other cash-strapped states, including Colorado, are likely to watch very carefully to see what happens with the request.
Brewer's request comes after two Arizona Medicaid participants awaiting transplants have died since Arizona decided to stop covering organ transplants. A recent statement by three highly credible national organizations, including United Network for Organ Sharing, refutes Arizona's contention that transplants are neither effective treatment nor cost effective.
Federal government releases 2011 poverty guidelines
The official poverty-level income for a family of four this year is $22,350, an increase of $300 from the previous guidelines. The federal Department of Health and Human Services issued the guidelines in the Federal Register on Jan. 20.
Poverty guidelines vary depending on family size, and different guidelines are issued for Alaska and Hawaii. The guidelines are a baseline for determining eligibility for many public assistance programs including food stamps and Medicaid. Extensive research from the Colorado Center on Law and Policy and many other organizations has demonstrated the poverty guidelines are a poor measure of a family's ability to make ends meet. A better measurement is available from the Self-Sufficiency Standard for Colorado, which accounts for variations in geography and family composition.
What's new
Repeal of hospital provider fee would be fiscally irresponsible and hurt low-income patients
A measure to repeal Colorado's hospital provider fee would eliminate health services for nearly 100,000 low-income Coloradans and put even more pressure on the state's budget. The Colorado Center on Law and Policy opposes the measure, House Bill 11-1025, sponsored by Rep. Janak Joshi (R-El Paso) and Sen. Kevin Lundberg (R-Larimer). The bill is scheduled to be heard in the House Health and Environment Committee at 1:30 p.m. Thursday, Feb. 10.
The hospital provider fee was established with the Health Care Affordability Act of 2009 (House Bill 09-1293). It allows Colorado, by partnering with hospitals and the federal government, to assess a hospital provider fee to generate additional federal Medicaid matching funds. The fee enables the state to expand health care access, improve the quality of care for clients served by public health insurance programs, increase funding for hospital care for Medicaid and uninsured clients, and to reduce cost-shifting to private payers. It was the single largest coverage expansion in Colorado in 40 years and a signature accomplishment of former Gov. Bill Ritter's administration.
As a result of the hospital provider fee, in Fiscal Year 2009-10 more than $590 million was paid to hospitals, with a net gain to hospitals of more than $124 million. In May 2010, Medicaid expansions were implemented for parents with incomes of up to 100 percent of the Federal Poverty Level (FPL) and for children and pregnant women with incomes to 250 percent of FPL. More than 27,000 more Coloradans now have health care coverage via those two expansions. A Medicaid buy-in program for people with disabilities is planned for summer 2011, and adults without dependent children with incomes of less than 100 percent of FPL will be covered for the first time in Colorado in early 2012.
Repeal of the hospital provider fee would reduce payments to hospitals by close to $600 million annually and would eliminate health services to almost 100,000 low-income Coloradans (the total number expected to be covered through the fee once it is fully implemented in 2012). In addition to the projected expansions of health insurance coverage, fee payments have been used to increase access to health care for the uninsured and improve quality. The fee is anticipated to reduce the cost-shift by hospitals to private insurance payers.
Repealing the fee would also have significant budget consequences for the state. Under the federal Affordable Care Act, Colorado will be required beginning in 2014 to expand Medicaid eligibility to all citizens and qualified aliens with incomes of less than 133 percent of FPL. While the federal government will pay 100 percent of the cost of the expansion initially, by 2020 Colorado must pay 10 percent of the cost. That is a very good deal for Colorado -- today the state pays 50 percent of the cost of Medicaid - but beginning in 2017 the state will have to come up with additional dollars to pay its share of the expansion.
The state does not yet have an analysis of how much repeal of the fee would cost Colorado. But the cost to hospitals now benefitting from increased payments for seeing uninsured and previously uninsured patients would be high. The human cost of leaving 100,000 people to wait until 2014 for health insurance coverage would be even higher.
Some other measures CCLP is following at the Colorado General Assembly
House Bill 11-1019: Exempt School-based Clinics Copay
CCLP's position: Support
The bill would make it permissible for school-based health clinics to waive copayments for children accessing services. The legislation reduces financial barriers for children accessing health care.
Senate Bill 11-08: Aligning Children's Medicaid Eligibility
CCLP's position: Support
The bill aligns eligibility for the Medicaid program so all children through age 18 with family incomes of up to up to 133 percent of the Federal Poverty Level are eligible for Medicaid. Currently, there are two different income limits for children in the Medicaid program, depending on whether the child is age 6 and younger (133 percent) or older than 6 (100 percent). The result is children from the same family can end up in two health care programs. Older siblings qualify for the Child Health Plan Plus program, which is administered differently and may have different provider networks. The legislation is important because current eligibility policy is confusing for families and inefficient. Aligning eligibility streamlines the enrollment process, relieving the administrative burden on families and the workers who process the applications. The bill also positions Colorado for health reform implementation because all U.S. citizens and legal residents with incomes of up to 133 percent of FPL will be eligible for Medicaid beginning in 2014.
What's next
Webinar explains the benefits of health reform for small businesses
Small-business owners can learn about the benefits of health reform for their firms during an online seminar next week put on by the CoPIRG Foundation, in conjunction with Small Business Majority and the USPIRG Education Fund.
The free, one-hour webinar, called "Your Bottom Line: What's in healthcare reform for your small business" will review federal and state provisions in the Affordable Care Act. "Topics being discussed include: small business tax credits (who's eligible for them and how to claim them), state insurance exchanges, high-risk pools, shared responsibility, cost containment, and tools and resources available for small businesses interested in learning more about the law," an event announcement said. A question-and-answer period will follow.
The event is set for 4 p.m. Thursday, Feb. 3. To participate, register online.
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. 28, 2011