Health Law and Policy Update
This week's updates:
- Federal budget proposal would be extremely irresponsible health policy
- State measure would impose premiums for CHP+, harming children
- Federal government announces plan for reducing health disparities
- Colorado health exchange bill hearing set for Wednesday
- Webinar explains how health reform affects small businesses
Headlines of the week
Federal budget proposal would be extremely irresponsible health policy
A federal budget resolution offered in the U.S. House of Representatives this week would repeal the Patient Protection and Affordable Care Act, and radically restructure the Medicare and Medicaid programs.
The Colorado Center on Law and Policy sent an action alert, asking respondents to contact their representatives in Congress and urge defeat of the bill. CCLP released an issue brief detailing the onerous provisions in the measure. Other analysis came from the Center on Budget and Policy Priorities and the Congressional Budget Office.
The Ryan proposal would impose a $660 billion cut over 10 years by repealing the expansion to the Medicaid program under the Patient Protection and Affordable Care Act.
It suggests a radical restructuring of the Medicaid health insurance program for people with low incomes by cutting $770 billion over 10 years by converting it to a "block grant" and permanently capping growth. Medicaid serves 569,000 participants in Colorado, providing long-term care to seniors and critical services that help Coloradans with disabilities live independently. It is also a core part of the successful coverage of Colorado's children with low-income parents.
Medicaid responds automatically in a weak economy, helping vulnerable Coloradans weather tough economic times. In fact, despite reductions in employer-sponsored coverage and increases in unemployment during the Great Recession, the number of children in Colorado who are uninsured actually declined in 2009. That is because programs including Medicaid performed exactly as they were intended, covering an additional 193,000 individuals, a 43 percent increase, since the beginning of the recession. Additionally, Medicaid spending on hospitals, clinics and other health care providers ripples through local economies, paying the salaries of nurses, doctors, and other vital health care workers, who in turn spend money at local businesses.
The draconian restrictions on funding as suggested by Rep. Ryan's budget proposal would mean that Colorado can only do less with less. The results would be reduced access to health care, poorer health outcomes and greater numbers of people lacking health insurance.
Former health insurance executive Wendell Potter offered his analysis of the health plans' role in the Ryan proposal in an opinion piece written for the Center for Public Integrity.
State measure would impose premiums for CHP+, harming children
Senate Bill 11-213 would impose monthly premiums on families that earn between 205 percent and 250 percent of the federal poverty level (between $44,700 and $55,875 a year for a family of four) whose children are enrolled in the Child Health Plan Plus (CHP+). Premiums would be structured based on the number of children in a family as follows: $20 per month for one child, and an additional $10 per child up to a maximum cost of $50 per month per family.
The measure is being taken up on second reading today in the Senate.
The proposal will raise an estimated $101,000 in Fiscal Year 2011-12 (the next budget year) and $1.5 million the following year and none of that money would go into the state's General Fund. It will cost almost $376,000 to reprogram the Colorado Benefits Management System to accommodate this change.
In addition, the projection is that 20 percent of children in that income group, a total of 2,398 children, will leave the program as a result of the new premiums. That analysis is consistent with the Colorado Center on Law and Policy's work on health care affordability, which found, based on interviews with 1,000 Coloradans, that at least 25 percent of families in the 200-300 percent of FPL income group have negative balances at the end of the month after paying for necessary expenses and meeting other financial responsibilities. Those negative balances exist before a family spends anything on health care.
Families in the targeted income category very often have little or no savings, and any unexpected expense, for example a broken water heater or needed car repair, could make it impossible for them to pay their premium that month. People in CHP+ are expected to pay co-payments for visits to the doctor, just as in any private insurance plan. The problem is costs between premiums and co-payments will max out some families' budgets, and that is more likely to happen with families that have a child who is chronically ill.
Children in families making between 205 percent and 250 percent of the federal poverty level have been eligible for CHP+ only since last May. The program expansion to that income group is supported by the hospital provider fee passed in 2009. Since no Colorado General Fund dollars are used to support the expansion, the budget effect over time will come from the revenue generated as a result of the fee. More significantly, Colorado will lose substantial dollars as children drop off the program -- a projected $400,000 in the first year and as much as $6 million total in year two. The loss results from hospital provider fee not collected and federal dollars left on the table. Colorado will realize a $1.5 million gain in exchange for the $6 million loss in funds if the bill passes.
In addition states must be very careful about the administrative costs of collecting monthly premiums. In 2002, Virginia decided to stop charging monthly premiums in its CHIP program because the state was spending $1.39 for every dollar collected. A paper from Georgetown University Health Policy Institute Center for Children and Families examines "Cost Sharing for Children and Families in Medicaid and SCHIP."
CCLP worked to eliminate monthly premium from the CHP+ program in 2000. At that time, the state was about to send families who fell behind in paying monthly premiums to the state central collections service. In the end, then-Gov. Bill Owens decided it made no sense to impose monthly premiums when so many families were unable to pay. Since then, CHP+ has established an annual enrollment fee, and families make co-payments for services, but they do not pay monthly premiums.
A fact sheet on the bill sets out detailed reasons for opposing it.
Federal government announces plan for reducing health disparities
The federal Department of Health and Human Services today announced a plan for reducing health disparities. From the department's news release:
Goals of the HHS Action Plan include transforming health care and expanding access, building on the provisions of the Affordable Care Act related to expanded insurance coverage and increased access to care. The plan also calls for more opportunities to increase the number of students from populations underrepresented in the health professions, train more people in medical interpretation to help serve patients with a limited command of English, and train community workers to help people navigate the system.
The plan also calls for HHS to set data standards and upgrade collection and analysis of data on race, ethnicity, primary language and other demographic categories in line with new provisions of the Affordable Care Act.
"Health disparities have burdened our country for too long," said Assistant Secretary for Health Howard K. Koh, MD, MPH. "This plan reaffirms and revitalizes a national commitment to helping all persons reach their full health potential."
Colorado health exchange bill hearing set for Wednesday
Senate Bill 11-200, establishing Colorado's Health Insurance Exchange will be heard in the Legislative Council Committee next Wednesday at 7:30 a.m. Any bill that establishes a new legislative committee must be heard by the Legislative Council Committee. The measure establishes a new legislative committee to oversee creation of the exchange.
Webinar explains how health reform affects small businesses
An Internet event set for April 11 will help small-business owners, policymakers and advocates learn about tax credits and other components of the Patient Protection and Affordable Care Act affect small businesses. The webinar is free and sponsored by Small Business Majority.
An important part of the Affordable Care Act for small businesses is the health care tax credit. "This credit will put much-needed funds back in small business coffers. But in order for small businesses to benefit from the credit, they need to learn how to take advantage of it on their 2010 returns," Small Business Majority said in a prepared statement.
More details and registration information are available online.
Health Care Director
Health Care Attorney
Released April 8 , 2011