COLORADO CONSIDERS HEALTH REFORM: “TOUGH CHOICES” AHEAD

Volume 28, Issue 504 November 26, 2007

Christina Kent

Add Colorado to the list of states that are considering ways to achieve near-universal coverage. In January, the state’s Blue Ribbon Commission for Health Care Reform will send to the General Assembly a plan that would provide coverage for nearly 90 percent of Colorado’s roughly 800,000 uninsured.

Some of the commission’s proposals are similar to those being implemented in Massachusetts. For example, the plan would require individuals to obtain coverage. Employers would be required to help workers buy coverage by allowing them to use pre-tax dollars to do so. State subsidies would help low-income residents buy coverage in the private market, and a state-chartered clearinghouse similar to Massachusetts’ “Connector” would help individuals choose among health plans.

But many of the recommendations are different from the Bay State’s plan. For example, the proposal would expand coverage to more poor Coloradans by reforming the state’s Medicaid and State Children’s Health Insurance Program (which Colorado calls CHP+). Medicaid and CHP+ essentially would be united into one program.

Parents and childless adults with incomes up to 200 percent of the federal poverty level would be allowed to enroll in the new Medicaid/CHP+. More children would be covered because the financial eligibility standards for children to enroll in CHP+ would be raised from 205 percent of the federal poverty level to 250 percent.

Enrollees would receive the CHP+ package of benefits, as well as additional benefits such as dental coverage for adults and (in an effort to keep enrollees healthy) copays for preventive and chronic care management would be eliminated. Children in the program would receive EPSDT wrap-around services. The disabled and elderly would remain in traditional Medicaid. The state would help pay for the new expanded program by applying for an 1115 waiver that would, if approved, provide federal matching funds at the CHP+ level (which is higher than the Medicaid match).

The individual insurance market would be reformed by requiring insurers to “guarantee issue” or sell coverage to “healthy” individuals (the criteria for “healthy” have not yet been defined). The state’s high-risk pool, CoverColorado, would be expanded as new criteria would be developed. Insurers in the individual market would be required to create a basic benefit package that would cost about $200 per month per person, as well as an HSA option, and delivery system choices (HMO, PPO, etc.).

According to a preliminary analysis by the Lewin Group, the proposal would leave only about 115,900 Coloradans uninsured in 2007/2008. Nearly 40 percent of these would be undocumented residents, who would not become eligible for public programs.

The Lewin Group has estimated that the proposal would cost just over $1 billion in public and private dollars. The state could help pay for the reforms by maximizing federal funding through the 1115 waiver, as well as by increasing tobacco and alcohol taxes, and initiating a 5 percent tax on snacks and soda. The state income tax could be raised as needed to fund whatever is not covered by the “sin” taxes. Under Colorado’s Constitution, any increase in taxes must be approved by a voter referendum.

Sifting Through Ideas

The 27-member commission was created by the General Assembly in 2006. In accordance with the law (SB 06-208) that set it up, the commission invited the public to submit recommendations for reform. Of the 31 proposals sent in, the commission identified four measures for additional consideration and left itself the opportunity to develop an additional proposal of its own. The commission voted on its proposal on Nov. 19, and will deliver it—as well as the four other proposals—to the General Assembly in January.

Twenty panel members voted in favor of the commission’s plan, and two—Linda Gorman of the Independence Institute and Mark Simon, an advocate for the disabled—voted against it. Five members were not present for the vote.

Earlier this summer, commission member Dr. Mark Wallace, founder of the Northern Colorado Health Alliance, told the Greeley Tribune that reform won’t be achieved unless people ask themselves several important questions. First, do we believe that health care is a right? And then, who should be covered, what should be covered and how much are we willing to pay for it? "I think we have to be honest that it's going to involve a lot of tough choices," Wallace told the Tribune.