Health care fares 'well' amid budget cuts

By Richard Haugh
THE COLORADO STATESMAN

Lawmakers dealing with shortfalls approaching $1 billion and a long line of interest groups looking for funding generally spared health care interests from the budget ax wielded so frequently during the 67th session of the Colorado General Assembly.

Compared with higher education and transportation, health care fared well. This year, however, “well” is a relative term. Few new programs were created, and those that were received modest funding.

“I thought we did a pretty good job based on what we had to work with,” said Rep. Jim Riesberg, D-Greeley, chair of the House Health and Human Services Committee. “We had more than a hundred bills come through our committee, and we built incrementally toward some of the things we wanted to do.”

By far the most significant health care legislation was the Health Care Affordability Act. A little less than one year after the idea was conceived, legislators passed, and Gov. Bill Ritter signed, House Bill 1293, sponsored by representatives Riesberg and Mark Ferrandino, D-Denver, and by senators Moe Keller, D-Wheat Ridge, and Betty Boyd, D-Lakewood.

Under the new law, most hospitals in the state will be assessed a fee, the amount of which has yet to be worked out by a 13-member oversight committee and sent to the state for approval.

The money collected from each hospital will be pooled and used to draw down matching funds from the federal Medicaid program. The resulting money — as much as $1.2 billion by some projections — will be used to expand health coverage for the state’s uninsured. It’s estimated that about 800,000 Coloradans are uninsured, including 180,000 children, and that about 440,000 residents receive Medicaid benefits.

The law will bolster the state Medicaid and Child Health Plan Plus (CHP-Plus) programs, and will provide enhanced funding for the current Medicaid system and for the Colorado Indigent Care Program (CICP). The provider fee program also will allow single adults with no minor children to be covered under the state’s Medicaid program if they make 100 percent or less of the federal poverty-level wage, or $10,830 per year.

“This was unquestionably the most important health care legislation this year,” said Steven Summer, president and CEO of the Colorado Hospital Association. “It will have a huge impact on every stakeholder in the health care system. Everyone, not just hospitals, will see benefits.”

The bill was supported by hospitals, physicians, consumer groups and business interests. Summer said the provider fee will cover at least 100,000 uninsured Coloradans — some experts project 200,000 — and reduce the burden of hospitals that care for patients who can’t pay. The fee is expected to reduce the need to shift those costs to insurance companies and employers, he said.

The revenue that will be generated by the provider fee comes just as Colorado’s cash-strapped government was considering cuts to Medicaid payments to the state’s hospitals and doctors. Early in the session, legislators were stunned by budget shortfalls of more than $300 billion this fiscal year and approaching $700 billion next year. Lawmakers proposed cutting payments to providers treating state Medicaid patients by 4.3 percent, which was rolled back to 2 percent.

Now, however, the new provider fee will allow payments to hospitals to rise to the maximum amount allowed by the federal government — the so-called upper payment limit — from a previous level that hospitals complained reimbursed them 30 cents to 40 cents for every dollar it cost them to treat Medicaid patients.

Riesberg added that the provider fee will bring increased revenue to the state without raising taxes or increasing spending from the state’s General Fund.

“This is an ingenious way to keep health care affordable for everyone,” he said. “It’s the most vital health care expansion we’ve made in years.”

The Legislature also addressed a number of issues affecting health insurance companies. By and large, the state’s health insurers are pleased with the outcome of the 2009 session, said Ben Price, executive director of the Colorado Association of Health Plans. He cited a number of measures that will expand access to health insurance coverage.

A key bill, signed by Ritter in late April, is House Bill 1143, sponsored by Rep. Spencer Swalm, R-Centennial, and Sen. Gail Schwartz, D-Snowmass Village. The new law authorizes HMOs to sell limited-benefit plans to uninsured Coloradans who earn too much money to qualify for Medicaid.

The plans will offer basic coverage of doctor visits, routine care and medications. Total benefits under the plans could not be less than $30,000 per year, but could be more. Similar plans sold in other parts of the country have annual limits of less than $100,000, and limits of $30,000 to $50,000 are common. Monthly premiums for such limited-benefit plans often are one-quarter to one-third less than comprehensive medical insurance coverage.

Proponents say basic coverage plans are better than no coverage. But critics say the plans give those who hold them a false sense of security. Riesberg said there’s a more important point — the law will improve access to care, not just access to insurance.

“When people refer to access, they mean insurance. But that’s just access to pay,” he said. “Even if you can pay for it, if there’s no one there to provide the care, it doesn’t help you.”

Supporters of HB 1143 say the law will encourage physicians to see more patients. Testifying on the bill in March, Cindy Palmer, a top executive with the San Luis Valley HMO in Alamosa, said, in many cases, patients without insurance could receive routine and preventive care that will reduce the need to treat more extensive and expensive care later.

“Give us time to test the waters on this,” she said. “This will put our employers back into the insurance market and provide access to care for many of their employees.”

Not all bills received favorable treatment this year. One bill that would create a new system of health care delivery and two insurance-related bills that have been circulating around the Capitol the last year or two were swept into the dust bin.

Rep. John Kefalas, D-Fort Collins, floated House Bill 1273, dubbed the Colorado Guaranteed Health Care Act, which was sponsored in the Senate by Joyce Foster, D-Denver. Kefalas’ bill would have created a 23-member Colorado Health Care Authority to study how a single-payer system of health care delivery could be funded and administered separate from state government and not subject to administrative control by the state.

A single-payer system was one of several options considered in 2007 by the Blue Ribbon Commission for Health Care Reform (dubbed the 208 Commission after its enabling legislation), launched by Gov. Ritter to study changing Colorado health care.

However, with startup costs in the billions of dollars and the state facing a fiscal black hole, few observers expected single-payer legislation to gain anymore traction this year than it has in past years. Lacking enough support to advance the legislation, Kefalas pulled his bill during a committee hearing in April.

Two other insurance-related bills also died during the session.

House Bill 1226 would have returned no-fault auto insurance to Colorado, but was killed in committee in February. In 2003, Colorado switched to a tort system of auto insurance, in which the at-fault driver’s insurance pays for medical bills and property damage. HB 1226, sponsored by then-Rep. Anne McGihon, D-Denver, and Sen. Morgan Carroll, D-Aurora, would have reversed that. Auto insurers argued that bringing back no-fault insurance would cost Colorado drivers millions dollars in premiums.

House Bill 1344, sponsored by Rep. Christine Scanlan, D-Dillon, and Sen. Betty Boyd, D-Lakewood, would have raised the cap on payments for pain and suffering in medical malpractice lawsuits to roughly $465,000 and indexed those payments to inflation.

During committee debate in April, Scanlan pulled language about the cap out of the bill, leaving in place provisions calling for malpractice insurance companies to get approval from the state’s Division of Insurance before raising premiums by more than 5 percent.

Even in its watered-down version, the bill lacked support and lost in a House vote April 22.

Rick@coloradostatesman.com