A committee charged with keeping watch over Colorado’s health care insurance exchange board held its first meeting on Monday, airing concerns about an imbalance of power by industry members over consumers on the board. Securing a steady funding stream for the exchange program was also discussed.
Some Colorado conservatives are concerned that it is still premature to implement the Colorado Health Benefit Exchange, noting pending lawsuits aimed at overturning President Barack Obama’s federal health care reform. Republican Attorney General John Suthers has entered Colorado into one of the lawsuits, a multi-state complaint that essentially says Congress does not have the constitutional authority to regulate interstate commerce, including mandating that taxpayers carry health insurance.
Senate Bill 200, passed by the state Legislature this year, requires an outline for implementation of the exchange — all funding must come from gifts, grants and donations. The bill had bipartisan support, including that of House Majority Leader Amy Stephens, R-Monument, who co-sponsored SB 200. No General Fund dollars will be set aside for the program. An independent third party will operate and manage the exchange program, which would work as a consumer marketplace for purchasing health insurance with the goal of lowering prices, similar to how airlines sell tickets through Expedia and Travelocity.
Estimates for the full cost of the program once it is up and running are still unavailable, according to Joan Henneberry, planning grant director for the Health Benefit Exchange, which is currently being managed by the Colorado Health Institute.
The state has already received a planning grant from the federal government for $999,987. Health Benefit Exchange staffers are putting a federal grant proposal together for a second planning grant. Dollar estimates for that are still unavailable, according to Henneberry. The second grant will be submitted to the board for review by Sept. 30, and money would become available in December.
A third federal grant for operational expenses would be available for implementation of the exchange through 2014, assuming the state proceeds with the program. The application for the third grant must be submitted in 2012.
The exchange is then responsible for coming up with its own funding stream in order to build and design its independent administrative function, said Henneberry. The exchange must be completely self-sufficient by 2015. The Colorado Health Benefit Exchange Board, which has already met twice, is currently in the process of choosing a board chairman, assigning an executive director, picking a location for offices, creating bank accounts and developing bylaws, according to Henneberry.
But in the meantime, Sen. Kevin Lundberg, R-Berthoud, a member of the Legislative Health Benefit Exchange Implementation Review Committee, is concerned that it will be difficult to raise the money to implement and maintain the exchange, perhaps wasting a lot of planning and operational time in the process. To an audience including members of the Colorado Health Benefit Exchange Board, Lundberg voiced his concerns, acknowledging on Monday that he is the “contention in this room.” He pointed out that the exchange is really the result of federal health care reform, and reminded the board and the committee that the debate remains quite controversial.
“We’re here, not just because of Senate Bill 200, but the federal legislation that really began this process, and frankly, provided the first million bucks for the health care exchange here in Colorado,” said Lundberg. “But I must remind the committee and the board that that, of course, was one of the most divisive pieces of legislation for Congress to pass in many, many years, and really brought about a change of Congress.”
Lundberg went on to raise concerns over how to fund the program.
“We should assume there is no more money from the federal government to implement this plan,” said Lundberg, noting the budget woes of the federal government which was forced to pass legislation Tuesday to raise the federal debt limit and reduce government spending by more than $2.1 trillion. “For this to make economic sense, it truly has to make economic sense within its own working mechanism, and the assumption that we’re going to somehow subsidize and make up the difference I believe is a false assumption both at the state and federal level.”
During the meeting on Monday, Lundberg sent a text message to Fourth District Congressman Cory Gardner, R-Yuma, asking for his perspective on funding a health insurance exchange program in Colorado. Gardner agreed with Lundberg that the board should proceed cautiously in assuming federal funding for its implementation.
“Money is tight, the debt ceiling package will cut spending in some areas of the president’s health proposal. So, whatever you do, I suggest you do it with a very sharp pencil,” Gardner wrote back to Lundberg.
Democrats and Republican supporters of the exchange, however, point out that the program has bipartisan support and was recommended in 2008 by the Blue Ribbon Commission for Health Care Reform, also known as the “208 Commission.”
“This exchange, regardless of what happens on the federal level, this kind of thing was recommended back when the 208 Commission made their recommendations, and so it is a concept that makes sense on a lot of different levels,” said Rep. Deb Gardner, D-Longmont, a member of the Legislative Health Benefit Exchange Implementation Review Committee. “Our committee has a good opportunity to facilitate that process that the board is going to move forward on regardless of what happens on the federal level.”
House Majority Leader Stephens also defended implementation of the exchange, noting that the goal is to lower costs for employers and consumers alike. Stephens took a public beating over SB 200 this year, with some conservatives suggesting that she was abandoning Republican principles and legitimizing federal health care reform by moving forward with implementation of the exchange. SB 200 was given the name “AmyCare” by conservatives who grew frustrated with her support of the legislation, a mocking reference to President Obama’s “ObamaCare.”
But Stephens says the legislation has always been about pro-market solutions to health care reform. She says she continues to hope federal health care reform will be overturned, and argued that SB 200 is about state’s rights, not about implementing government mandates. She calls the legislation a framework for a health care exchange that aims to lower costs for businesses and consumers.
“This has zero to do right now with something in terms of the federal lawsuit. We knew the federal lawsuit was happening when this bill was being run, and this bill has zero to do with ‘ObamaCare,’” Stephens told The Colorado Statesman. “What this is about is that currently, like it or not, ‘ObamaCare’ is the law of the land and states are being asked to at least come up with some sort of plan, and what Senate Bill 200 was, was the outline of a plan, not the plan.”
Meanwhile, some on the oversight committee are concerned that the insurance industry has an unfair advantage on the nine-member Colorado Health Benefit Exchange Board. Appointments by the governor, Senate and House majority and minority leadership include representatives from Anthem Blue Cross, UnitedHealthcare of Colorado and Rocky Mountain Health Plan, to name a few. Also serving on the board is Eric Grossman, vice president of TriZetto, a health care information technology provider. Health reform advocates have asked Grossman to resign because they believe his appointment “tips the scales away from a board concerned with meeting the health care cost, coverage and quality needs of small businesses, individuals and families and toward the interests of insurers,” according to a letter submitted to The Statesman by the Colorado Consumer Health Initiative. Grossman’s critics argue that he has “extensive ties” to the health insurance industry.
Grossman was hesitant to discuss balance on the board when asked about it by The Statesman on Monday, arguing that the board is solely concerned with implementing a fair health insurance exchange in Colorado.
“We weren’t a part of the appointing entity, we’re all just trying to do our civic duty and contribute, and we’re committed to what the governor decides on that,” said Grossman, noting that Democratic Gov. John Hickenlooper appointed him. “At the end of the day, we’re working on creating a sustainable exchange and to help Coloradans get access to care from the private sector.”
But Sen. Irene Aguilar, D-Denver, also a member of the Legislative Health Benefit Exchange Implementation Review Committee, pointed out that the law requires a majority of the voting members to be individuals who are not directly related to the health insurance industry. She believes there are credible concerns regarding a potential imbalance of power on the board.
“I don’t think one person intended to or intentionally appointed a majority from the industry, but I think there are legitimate concerns that the industry is over-represented on the board, and that consumers are under-represented,” she said.
Steve ErkenBrack, chief executive of Rocky Mountain Health Plan, acknowledged that he is “clearly associated with the health insurance industry.” But he believes the entire board can be objective.
“The controversy that sort of started speaks to a broader issue than just the composition of the board, and that is the importance of the board to reach out to the consumer community, to the business community, to the provider community, to a number of constituencies who realize they are going to be affected by the board’s work, and I think that will be an ongoing effort,” said ErkenBrack.
“I [want to] allay the concerns of this oversight committee that we might be a passive board,” he continued. “That’s not going to be the case, I’m fairly confident.”
Sen. Betty Boyd, D-Lakewood, chair of the Legislative Health Benefit Exchange Implementation Review Committee and the Senate co-sponsor of SB 200, said during a media availability prior to the meeting that she does not believe there is an imbalance on the board.
“At this point, I’m not comfortable saying somebody’s got to resign,” said Boyd. “I think we should wait and see how people work sitting on that board. It appears to be industry heavy sometimes, but I think a lot of those people who come from the industry also have experiences in other places where they’re active…
“Until I see a decision being made that seems to be out of balance, or out of whack, I’m comfortable to let that [board] move forward and do what they’re supposed to do,” she added.