Welcome to the new Health Law and Policy Update from the health team at the Colorado Center on Law and Policy. The recent hiatus in discussions about federal reform gave us an opportunity to retool our weekly update. From now on, the update will explore health policy and reform at both the state and national levels, equipping our friends and allies with information for discussions about health care reform, especially about its impact on consumers and low-income Coloradans.
Headlines of the week
Federal health summit today
President Barack Obama
unveiled a detailed proposal Monday for reforming the U.S. health care system. He also confirmed he does not intend to start discussions from scratch at the presidential summit on health care reform scheduled for 8 a.m today. Obama's plan is based on bills the House and Senate passed last year. The president challenged the opposition to release a comprehensive counterproposal.
Why incrementalism won't do the jobA
Wall Street Journal article this week pointed out the trouble with small steps toward reform or starting from scratch: "The president explored a scaled-back approach and asked his staff to examine areas of broad political agreement, according to congressional aides involved in the process. The exercise quickly pointed to a practical problem: You could not make incremental changes that were politically popular without pursuing the whole package. For instance, Republicans and Democrats agree they should prevent insurers from denying coverage based on pre-existing conditions. But without a mandate requiring healthy people to buy coverage, insurers would wind up with a slew of sick customers without healthy ones to balance them out. That would likely lead to either soaring premiums or a bankrupt industry."
New CCLP report examines effects of proposed reforms
Insurance rate hike catches attention of Colorado regulators
The Colorado Division of Insurance is
conducting a review after receiving an unusually high number of complaints about premium increases of up to 33 percent by Anthem Blue Cross Blue Shield. The company has nearly 100,000 policyholders in the state, The Denver Post reported citing state records.
Anthem Blue Cross Blue Shield enacted big rate hikes recently in many parts of the country, which
The New York Times opined "provided a textbook example of why the nation badly needs comprehensive health care reforms."
Status report
Recovery Act provides extra Medicaid funding to Colorado
Historically, half of the funding for Colorado's Medicaid program has come from the state, and half from the federal government. The federal part of the formula is known as the Federal Medical Assistance Percentage or "FMAP." One of the effects of the American Recovery and Reinvestment Act of 2009 (ARRA) was to increase the percentage of FMAP that Colorado receives.
Under ARRA, Colorado's share of Medicaid funding dropped from 50 percent to just under 38 percent between Oct. 1, 2008, and Dec. 31, 2010, and during that period, the federal government picks up the remainder. Medicaid is a countercyclical program; caseloads increase during an economic downturn. Colorado's Medicaid caseload has increased at an unprecedented rate during the past 18 months; today about 10 percent of Colorado's population is on Medicaid. The enhanced FMAP was designed to help states address the budget impacts of the recession. Without the ARRA funds, Colorado would be in a far worse budget situation and likely would have had to make even deeper cuts to Medicaid.
Colorado's and the federal government's shares of Medicaid spending are scheduled to revert to 50-50 split at the end of this year. But on Wednesday U.S. Sen. Michael Bennet released a letter signed by 44 senators calling for a six-month extension of the policy. Colorado's other U.S. senator, Mark Udall, did not sign the letter.
State bill grants too much power to insurance companiesThe Colorado Center on Law and Policy opposes House Bill 10-1160 because it ties, for the first time in Colorado, health insurance premiums and copayments to the achievement of outcomes specified by the insurance industry. The idea is an individual or someone working for a small business, and the small business itself, could get a health insurance discount if people working for that business addressed their health risk factors. While health risk factor is not defined, it likely means that if you do things like lowering your cholesterol, losing weight or controlling your blood sugar you would get a discount on your premium.
While this sounds good, it raises significant issues: First, is whether health insurance should be about sharing risk, or treating individuals differently for different reasons. Second: Whether it is possible to provide discounts to some without raising costs for others. Third: Whether carriers should set standards for what your cholesterol or weight or other health factors should be. Fourth: Whether you are concerned about your privacy if you fill out a health risk assessment at work in order to participate in a wellness program.
CCLP supports wellness and prevention programs, but not if they're tied to premiums and co-payments. Doing so skews the foundation of the health insurance marketplace and puts people at risk of having to pay more if they don't or can't participate.
What's next?
The presidential summit is scheduled to began at 8 a.m. today. Watch the White House's
health reform Web site for details, and look for analysis in next week's update.
Who's doing what?President Obama's proposal for health care reformHow does
the Obama plan compare to the House and Senate bill versions? It primarily builds on the Senate version but responds to concerns of the House while adding a few new elements. The proposal:
- Improves the Senate's subsidy structure for lower-income individuals and families. Families with annual incomes of less than $44,000 and more than $66,000 would pay less in premiums.
- Changes the effective date of the excise tax (better known as the Cadillac Tax) to 2018 and raises the threshold for premiums exempt from the assessment from $8,500 for singles to $10,200, and from $23,000 for families to $27,500. After implementation in 2018, it indexes these amounts for subsequent years at price inflation plus 1 percent.
- Requires individuals to buy or have health insurance starting in 2014 and imposes a penalty of $325 in 2015 or 1 percent of total income, whichever is higher for people who remain uninsured. Hardship exemptions are available when premiums exceed 8 percent of income, and couples with incomes of less than $18,700 are exempt from the requirement.
- Reforms the insurance market by prohibiting annual and lifetime benefit limits, requiring coverage of prevention services and prohibiting insurance companies from denying coverage based on pre-existing conditions.
- Increases money the federal government gives to states to pay for mandated Medicaid expansions. Obama's proposal calls for federal financing for 100 percent of the expansions for the first five years, from 2014 to 2017.
- Creates a federal Health Insurance Rate Authority that can review and block premium rate increases it deems excessive and provide oversight of other unfair practices in state insurance plans.
From the
Center on Budget and Policy Priorities: "All in all, the proposal represents a marked improvement over the Senate bill. Most important, while the proposal is certainly not perfect, it represents a dramatic improvement over the current health care system. There is an enormous chasm between this plan and the status quo, under which the ranks of the uninsured will continue to grow and health care costs will continue to rise inexorably."
What you can do
Contact members of Colorado's delegation in Congress to urge them to pass comprehensive health care reform.
Contact Sen. Mark Udall to urge him to join efforts to extend the enhanced FMAP policy.
Contact your state representatives to express opposition to 10-HB-1160.
Let us know what you think of the update. Contact CCLP's communications director,
Perry Swanson. We're eager for ideas on making it more useful.
