Health Law and Policy Update
This week's updates
- Federal judge upholds the Affordable Care Act
- Governing structure will be critical to effective exchange
- Lawmaker withdraws effort to repeal Hospital Provider Fee
- Health reform will reduce consumer costs, create jobs in Colorado
- 2010 Health Insurance Costs Report
- New report details risks to states from block granting Medicaid
- Legal Services funding at risk, what you can do
Headlines of the week
Federal judge upholds the Affordable Care Act
A third federal judge has ruled the Affordable Care Act (ACA) is constitutional, marking another step toward the likely final resolution by the U.S. Supreme Court.
Judge Gladys Kessler of the U.S. District Court in Washington D.C. on Tuesday dismissed a lawsuit that claimed the Affordable Care Act's requirement that most people buy health insurance is unconstitutional.
"The individual decision to forgo health insurance, when considered in the aggregate, leads to substantially higher insurance premiums for those other individuals who do obtain coverage," Kessler wrote in a 64-page opinion, according to Bloomberg News. "Thus, the aggregate effect on interstate commerce of the decisions of individuals to forgo insurance is very substantial." The Court also noted "the ACA is not as unprecedented as Plaintiffs claim ... Congress's broad power to regulate individual behavior under the Commerce Clause is well established... the mere fact that a case presents a novel set of facts is not cause for viewing an act of Congress with skepticism or doubt.
Kessler's ruling marks the fifth federal court decision on national health reform. Three judges have upheld the Affordable Care Act's constitutionality, and two have invalidated all or part of the law.
What's new
Governing structure will be critical to an effective exchange
State leaders who are working to build Colorado's Health Insurance Exchange should ensure the governing structure is designed to serve individuals and small businesses who need health coverage, Colorado Center on Law and Policy Health Care Director Elisabeth Arenales said in an opinion piece published Wednesday.
"Colorado's exchange ought to serve the interests of the individuals and small businesses who choose to use it to buy health insurance. The exchange board and the exchange itself should inspire public trust and be publicly accountable. If these are the priorities, everything else will follow," Arenales said in the piece on the Health Policy Solutions website.
Lawmaker withdraws effort to repeal Hospital Provider Fee
A lawmaker sponsoring a measure to repeal Colorado's Hospital Provider Fee withdrew his proposal Tuesday, saying he didn't expect adequate support for the bill to pass.
Rep. Janak Joshi, R-Colorado Springs, had argued the fee violated the state Constitution, a view the Colorado Center on Law and Policy rejects.
Repealing the fee would have eliminated health services for approximately 30,000 low-income Coloradans and halted projected expansions to another 80,000 low income Coloradans. The Colorado Center on Law and Policy, along with many organizations statewide, opposed the move.
Health reform will reduce consumer costs, create jobs in Colorado
Health insurance premiums in Colorado will be 10 percent to 25 percent lower by 2019 than they would have been without health reform, according to new research commissioned by The Colorado Trust. In addition, the expansion of coverage that will result from the Affordable Care Act (ACA) will create 19,000 new jobs in the state, the research found.
"Even as Colorado and its citizens are poised to realize economic gains as a result of federal health care reform, these savings may not be achieved if we do not commit to the full and careful implementation of the Accountable Care Act," Ned Calonge, president and CEO of The Colorado Trust wrote in The Denver Post on Wednesday.
To listen to Colorado Trust CEO discuss the report on Colorado Matters click here.
2010 Health Insurance Costs Report
In 2008, the Colorado Division of Insurance was directed by the General Assembly to issue an annual report on health insurance costs. The report on 2010 health insurance costs released this week includes information about the cost of health care, the factors that drive the cost and the financial status of health carriers.
Some highlights of the report:
An estimated 771,200 Coloradans or 15.7 percent of the population were uninsured in 2009.
More Coloradans were covered by private health insurance than are covered by private insurance in other states. 61.3 percent of Coloradans get their insurance either through the commercial health insurance market or a self insured employer plan, compared to 54.1 percent of the citizens of other states.
23 percent of Coloradans were covered by a public health insurance plan- Medicaid, Child Health Plan Plus, Medicare, the Federal Employees Health Benefit Plan and the VA.
Health insurance premium costs grew at a faster pace than wages or inflation.
The number of small business group plans decreased by 10 percent, in 2009 and the number of covered lives in the small group market decreased by 13 percent, from 330,998 to 287,239. For comparison, ten years earlier, in 1999, 478,344 people were covered by Colorado's small group marketplace.
In 2009, the top 10 companies increased their small group market share to include 99 percent of all lives covered, compared to 97.5 percent in 2008.
While there are approximately 400 health insurance carriers doing business in Colorado, the 10 largest carriers have nearly 70 percent of the market share.
The top four carriers when it comes to market share in 2009 were: Kaiser Found Health Plan of CO (22.6 percent of the market); Anthem Blue Cross and Blue Shield (12.6 percent); UnitedHealthcare (9.9 percent), Pacificare of CO, Inc. 8.8 percent).
The average "loss ratio" reported in 2009 was 76.84 percent. Carriers reported a combined total of just under $300,000 spent on lobbying activity in 2009, broker commissions represented 3.9 percent of premiums - at a total expense of $225,965,884, and profit and contingencies were 8.64 percent of premium for a total of $500,915,034.
The average Medical Loss Ratio (MLR) reported for the10 companies with the largest market share was 85.2 percent. The highest five year average MLR among the top 10 carriers was reported by Kaiser at 90.13 percent and the lowest by United Healthcare at 79.58 percent.
Approximately 43 percent of Colorado companies with fewer than 50 employees offer health insurance compared to 97 percent of larger firms.
The average annual premium in Colorado in 2009, was $4,570 for single coverage and $13,360 for family coverage. In 1999 those costs were $2,312 for an individual and $5,822 for a family.
The percentage of health insurance premiums that Colorado employees are being asked to pay by their employers is growing faster than the national average. Coloradans who get health insurance through their employers pay 22 percent of the total premium for individual coverage and 25 percent for family coverage. Compare to 18 percent for individual coverage and 23 percent for family coverage nationally.
Click to see the report and news release.
New report details risks to states from block granting Medicaid
A report issued this week by the Center on Budget and Policy Priorities outlines the risks to states if Medicaid were converted to a block-grant program. A block grant program would meanthat the federal government would designate a fixed amount of money that would be awarded to each state for its Medicaid program. Medicaid is an entitlement, and Colorado and the federal government currently match state expenditures - in Colorado the match rate is typically 50-50, for every dollar we spend on Medicaid the federal government allows us to draw down a matching dollar.A block grant would set a fixed limit on the dollars available to states, regardless of changes in enrollment, such as those driven by the recession.
Proposals to turn Medicaid into a block-grant program are circulating as a way to cut the federal budget. A block grant would mean greater predictability in the federal Medicaid budget and would decrease the rate of growth in the Medicaid program from a budget standpoint. However, the proposals would decrease state flexibility and increase state risk, particularly during economic downturns when state revenues decline and Medicaid caseloads increase due to decreases in income and increases in unemployment rate. These proposals would limit Medicaid's role as a safety net and undermine states' ability to expand coverage.
Call to Action
Legal Services Funding at Risk. What you can do.
Last week the U.S. House passed a bill that funds the federal government for the remainder of fiscal year 2011. That bill cuts $70 million in funding to the Legal Services Corporation, which translates to $765,000 in cuts for Colorado Legal Services over the next 8 months. Such a funding cut would be devastating to civil legal aid for low-income Coloradans.
Click here for the fact sheet.
The bill now goes to the U.S. Senate for a vote. While the bill is expected to die, Colorado's Senators need to hear from us that these cuts are unacceptable. Please call Senator's Udall and Bennet and ask them to oppose the cuts.
For Senator Bennet call 202-224-5852.
For Senator Udall call 202-224-5941.
Note to readers
Health Law and Policy Update will be on vacation next week. We'll return the week of March 7.
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 Feb. 25, 2011