Panel nixes 'value' health insurance

By Richard Haugh
THE COLORADO STATESMAN

A panel created by Gov. Bill Ritter last year concluded that this probably isn’t the right time for Colorado to create a new health insurance program subsidizing the uninsured.

House and Senate Health and Human Services committees met jointly April 2 to hear the panel’s findings. The report was required under the legislation introduced by former Sen. Bob Hagedorn, D-Aurora, in the Senate late in last year’s session.

Called Centennial Care Choices, the law called for a 19-member panel appointed by Ritter to examine proposals from health insurers to offer stripped-down “value benefit plans.” The proposed plans would provide barebones coverage as an option for Colorado’s 800,000 uninsured who make too much money to qualify for
Medicaid but too little to afford private insurance.

The seven plans submitted by health insurers were evaluated by the Centennial Care Panel, the Department of Health Care Policy and Financing (HCPF) and the Department of Regulatory Agencies (DORA).

The groups concluded that if the proposed plans existed, very few uninsured Coloradans would be able to afford their premiums. As a result, the state would need to subsidize most or all of the premiums for those who are eligible.

With the state facing nearly $1 billion in revenue shortfalls in the next two years, that isn’t likely to happen, according to the report.

“Recognizing today’s economic realities, it is clearly a difficult time to ask the Legislature to introduce a costly new subsidy program,” the report states.

Joan Henneberry, executive director of HCPF, told committee members that five of the seven proposed plans would offer basic primary care and preventive care services with little or no out-of-pocket spending. The trade-off, she said, is that for many other covered services, copayments, coinsurance and deductibles probably would swamp plan beneficiaries.

“It really makes participants gamble that they’re not going to need those higher cost services,” Henneberry said. “It would put at financial risk people who can least afford such uncertainty.”

Henneberry noted that, in such a case, lower income consumers could wind up with more medical debt and face potential medical bankruptcy.

Sen. Morgan Carroll, D-Aurora, wondered whether despite the risks Henneberry cited, some coverage under the limited-benefits plans would be better than no coverage. Henneberry said the panel agonized over that question and concluded that whatever action it decides, the state has to do something.

That’s the same conclusion lawmakers came to when debating House Bill 1143, sponsored by Rep. Spencer Swalm, R-Centennial, and Sen. Gail Schwartz, D-Snowmass Village. That bill — passed and sent to the governor Monday — creates a pilot program allowing health maintenance organizations to offer basic insurance plans at greatly reduced premiums to uninsured people in markets with fewer than 25,000 people.

The state’s insurance commissioner told legislators at the Centennial Care hearing that the dismal economy is leaving the state’s uninsured in a huge bind — one that lawmakers will have to address sooner rather than later.

“There are some tough decisions that have to be made,” said Marcy Morrison. “I don’t think you can kick the can down the road too much farther.”

In related Statehouse action this week:

• House Bill 1293, designed to boost Medicaid revenue to Colorado hospitals by imposing a fee on individual hospitals, passed the Senate on Monday. The so-called provider-fee legislation would bring an estimated $600 million in federal Medicaid funds, matched by an equal amount collected from hospitals. The House is considering Senate amendments to the bill, sponsored by Rep. Jim Riesberg, D-Greeley, and Sen. Moe Keller, D-Denver. If the House doesn’t concur with the amendments, the bill will go to a conference committee; if it does concur, the bill will go to Ritter.

• House Bill 1273, which would create an authority to research and propose a single-payer system of health care in Colorado, passed an initial voice vote in the House on Monday following a sometimes contentious floor debate. As of late Wednesday, the bill was awaiting a final House vote. HB 1273 is sponsored by Rep. John Kefalas, D-Fort Collins.

Rick@coloradostatesman.com