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FAQs

Frequently Asked Questions

 

 

Questions About the Recommendations

 

Why are you recommending an individual mandate?

There are compelling reasons to require everyone to have insurance. First, our analysis demonstrated that the proposals that included that requirement had the biggest impact on reducing the number of uninsured Coloradans.

 

Second, it brings more people into the insurance pool. That's important, because people who don't have insurance often can't pay for the care they receive. So doctors and hospitals cover that cost by passing it along to people who do have insurance. This is called the "cost shift," and it's a hidden tax that contributes to rising insurance costs for everyone. If we can extend insurance coverage to more people, we can minimize the cost of caring for the uninsured, and stabilize rising health care premiums.

 

It's important to understand that this requirement can only work if insurance is accessible and affordable, and if the requirement is enforceable. So our recommendations also expand public programs to cover more people ¿ provide sliding-scale subsidies to allow low-income people to purchase private insurance ¿ and reform the insurance market to make individual insurance more affordable. We also enforce the insurance requirement through the income tax system.

 

But it's not fair to force people to buy insurance if they don't want it.

People can still opt out of the insurance requirement if they wish; they'll simply have to pay a penalty.

 

It's not fair to make younger people subsidize older people's health care costs by making them buy insurance.

That's part of how insurance works. You pay into a pool in order to spread the risk and the costs. Note, though, that we still allow insurers to price policies according to age, so younger people will pay somewhat less than older people.

 

Why aren't you requiring employers to provide insurance?

Our recommendations require employers to provide pre-tax premium-only plans that help employees to purchase insurance on their own. We've gotten input from the business community ¿ for example, our Business Advisory Task Force ¿ that this is a requirement that is feasible for them. We are not requiring employers to provide insurance coverage ¿ in part because it is simply not affordable for many small employers to do so, and because such a mandate would not be likely to hold up in court.

 

Why are you recommending guaranteed issue in the individual market? In other states where that's been tried, the insurance market has collapsed.

The difference here is that we're coupling it with a strong, enforceable requirement to have insurance that will bring healthy people into the pool, not just those with health conditions. That will stabilize the risk and mean that insurers will be able to afford to write policies in the individual market.

 

Why aren't you recommending a single payer approach ¿ isn't it the only plan that saves money?

The first decision the Commission had to make in developing its recommendations was whether to build on the current system, or to start over from scratch. The Commission's recommendations seek to build upon and improve our current system, which rests on a public-private partnership. Ultimately, the Commission did not believe it was appropriate to move to a government-run system.

 

While there are many attractive elements to a single-payer system, there are many challenges as well, including the need for significant waivers from the federal government and even, probably, acts of Congress. These are not necessarily insurmountable obstacles. But they are undoubtedly problematic.

 

That said, we recognize that many Coloradans want a single-payer approach. That's why we tried to create an optional additional plan that would offer some of the advantages of the single-payer approach, such as "portable" coverage that stays with you regardless of where you work, if you work or your health status. We didn't have enough time to really figure out how that kind of optional portable plan might work, but we think it's worth continuing to explore it, and we've recommended that the legislature do that.

 

This all looks like the heavy hand of government. Why didn't you recommend more market-driven, consumer-directed reforms?

We've tried to build on the existing public-private system because we believe that partnership is the best way to meet the needs of all Coloradans. Consumer-directed plans like HSAs can be great vehicles for some people, and we haven't done anything to diminish their availability. But they're not practical for low-income people who can't afford high-deductibles. Our recommendations expand consumers' choices and provide a range of options to meet the needs of people at differing income levels.

 

Why are you suggesting subsidies for people to buy private insurance when that market is so fragmented and costly?

Most Coloradans get their insurance in the private market, either through their employers or through non-group coverage. We want to minimize disruption to those existing arrangements, while making the private insurance system work better for more Coloradans. That's the purpose of the subsidies.

 

How can you recommend using public dollars to line the pockets of insurance companies?

The framework for our recommendations is to build on the current system. Private coverage is the way in which most Coloradans get their insurance now. Rather than try to move everyone to a government-run system, we believe it's appropriate to make our current system work better.

 

Your reforms won't apply to people on Medicare and those covered by self-insured plans ¿but those folks will still have to pay for these reforms. That's not fair.

We believe that all Coloradans will benefit from the changes we put in place to stabilize rising costs, improve quality and enhance efficiency. We all have a stake in the game.

 

Your administrative simplification recommendations won't save the money you anticipate. Many of these things are already in statute; others are pending action at the federal level. Insurers can't afford to deal with a patchwork quilt of state regulations; we need to give these efforts time to take shape nationally.

We believe Colorado's doctors, hospitals, health plans and consumers can gain a great deal from the administrative simplification recommendations we've identified. While it's true that some of these ideas are addressed in existing statutes or have been adopted voluntarily by some plans, there is more that can be done. It's important to recognize that the reforms we are suggesting have already been endorsed by national associations of health plans. That means that, if federal legislation along these lines ever does take place, it will likely be in line with what we are recommending.

 

Aren't you creating an underinsurance problem by recommending a basic benefits package?  What about the $50,000 cap?  Will the plan cover (xxx) condition? 

The Commission wanted to make sure that people can afford to buy health insurance, particularly if everyone is required to have coverage.

 

It is important to understand that the minimum benefit plan is relevant only for families and individuals above 300% of the Federal Poverty Level (about $60,000 a year for a family of four) in the individual market. Everyone under 300% FPL will get a comprehensive plan (Medicaid or CHP+ equivalent) that is entirely or almost entirely subsidized.  

 

The Commission did not recommend what should be in the minimum benefit plan, nor did it recommend a specific benefits cap.  We included a specific package with a $50,000 cap in the 5th proposal in order to analyze the potential cost, but that benefits package is not included in the recommendations. 

 

What about benefits?  Do the recommendations cover (xxx) condition?

The Commission did not recommend a specific benefits package. That's a conversation for further down the road. Our goal was to establish a broad framework for reform.

 

The Improving Value in Health Care Authority included in the Commission's recommendations¿ which would include consumers, insurers, providers and other stakeholders ¿ would be in charge of determining what's included in the minimum benefits package.

 

Why are you forcing high-risk people into CoverColorado?

CoverColorado will look very different under our recommendations, and it's designed to work better for people with high-risk, high-cost conditions.

 

It's part of a two-pronged approach to help keep policies affordable in the individual health insurance market. (Remember, we are not talking about the employer-based insurance marketplace here.) We create a pool for those at "average"risk and another for those with high cost conditions. These provisions apply only to people in households above 300% FPL, or about $60,000 annual income for a family of four.

 

For those at "average" risk ¿ We would require health insurance companies to issue coverage to any individual or family who applies for individual health insurance and who is not eligible for the restructured CoverColorado program. Premiums in this pool would not be based on current or previous health conditions.

 

That means that people with conditions such as asthma or allergies ¿ who currently face either very high premiums in the individual market or can't get coverage at all ¿ can get affordable health coverage.

 

At the same time, we would restructure CoverColorado to cover a list of specified high-cost health conditions. The plan would be subsidized in order to keep premiums at a manageable level. We recommend it be structured so that people in the new CoverColorado pay the same amount, for the same benefits package, as people in the "average" risk pool. Remember, we're talking about people who are not income-eligible for Medicaid or subsidies who need a significant level of care.

 

By establishing these two pools, we can keep premiums affordable for everyone.

 

Why didn't the Commission address coverage for undocumented workers?

The Commission struggled with this issue and decided that health care reform is not the place to tackle the issue of immigration reform.

 

Why should we take action in Colorado now, when all the presidential candidates are talking about major reform at the national level?

It's encouraging that everyone is talking about the need for change on a national level. But that takes a long time. Colorado¿s problems are too pressing and too real to wait, and there is a great deal we can do at the state level now without federal action.

 

How can you expand eligibility for Medicaid and CHP+ when the president has vetoed all the bills to expand SCHIP?

We want to enroll kids in families making up to 250% FPL (about $50,000 annual income for a family of four) in CHP+; that¿s allowed under current guidelines and funding. We'll need approval to enroll their parents, and also to expand Medicaid eligibility to all adults making up to 205% FPL, or about $21,000 annual income for an individual. It's important for us to pursue these expansions, because we can cover a large percentage of Colorado's uninsured if we do.

 

What other states have done a good job at health reform? What have you learned from them?

Most states are working on health reform right now, because they're all experiencing the same kind of problems of cost and access that Colorado is facing. And most of them are pretty much where we are now ¿ they're still figuring it out. A few, like Massachusetts, have begun to implement reforms, but it's too soon to tell their impact. We've looked at other states' approaches, and gotten some ideas from them. Of course, each state's circumstances are unique, and we've adapted those ideas ¿ for example, the requirement for everyone to have insurance ¿ so that they'll work for Coloradans.

 

 

It looks like you've just copied Massachusetts' approach. But their reforms have already gone way over budget. We can't afford that.

We've adapted a couple of ideas from Massachusetts ¿ innovative reforms that we believe can be successful in Colorado. At the same time, we've learned from Massachusetts' experience. For example, it's clear that they did not acknowledge the real cost of their reforms. We've gone through multiple rounds of evaluations on all the proposals, including our own, and are confident that we're providing legislators good estimates. Bear in mind that Massachusetts is still in the early stages of implementing their reforms, and that we can't directly translate their experience to Colorado ¿ our circumstances are different, and our total package of reforms is different and designed specifically for Colorado.

 

Your recommendations are essentially the same thing as your fifth proposal. Why didn't you simply call that the lead proposal?

The Commission's package of recommendations is, indeed, largely drawn from the fifth proposal, though it is not identical. Legislators made clear that they did not want us to identify a "lead" proposal ¿ they wanted an analysis of differing approaches and recommendations drawn from that. That is what we have delivered to them.

 

What comes next? What can I do?

The Commission has presented its recommendations to legislators, who will now act upon them. Comprehensive health reform in Colorado will take time ¿ we won't solve this problem in a legislative session, or a year. The best thing you can do is to stay informed and engaged as our state goes through this process. Our leaders need to hear that this issue matters to you.

 

 

Questions About Cost

 

How much will this cost?  

While we did not evaluate the cost of this exact package of recommendations, it is closely aligned with the Commission's 5th proposal. We estimated the cost of that proposal at a little over $1 billion.

 

Right now, we're already paying for the uninsured ¿ more than $900 of the average annual family insurance plan is the cost of covering uncompensated care provided to those who don't have insurance. If we do nothing, that cost will continue to increase and our insurance premiums will continue to get more expensive. If we invest in system changes, though, we can stabilize those rising costs.


 

How much will this cost me?

We can't estimate specific impacts on consumers and businesses until we know how any reforms would be financed, and that is a decision that the legislature must make.

 

Where will the money come from?

Legislators instructed the Commission very clearly not to specify how these reforms should be paid for. That is a decision that legislators must make.

 

My insurance premiums keep going up and up and up. Will your recommendations make my premiums go down?

We believe that our recommendations will stabilize the growth of insurance premiums and help you get more for your health care dollar. For example, by bringing more people into the insurance pool, we can reduce the cost shift ¿the "hidden tax" ¿ that drives up premiums because those with insurance are paying for those who don't have insurance and can¿t pay for their care. That will stabilize premium growth.

 

We're also recommending administrative streamlining for providers and health plans, to reduce some administrative costs. And many of our recommendations represent long-term investments that may cost some money up front but can stabilize costs in the long run ¿ for example, health information technology that can further streamline administrative processes and improve quality of care.

 

There are many factors, though, that drive up health care costs ¿ things like increasing use of expensive medical technologies, rising pharmaceutical costs, medical errors, and many others. Some of those issues are being addressed in other forums; some were simply too big for the Commission to take on in our limited timeframe. The Improving Value in Health Care Authority in our recommendations would be an appropriate place to identify solutions to many of these issues.

 

You talk a lot about the amount of the "cost shift" and its impact on health insurance premiums, but I've seen some estimates of the cost shift that are just a fraction of what you say it is. Is it really that big a problem?

Different methods of calculating the cost shift can yield different results. But it's real, and it's growing and it affects everyone's health insurance premiums. While many other factors drive up the cost of health insurance, the cost shift is one that we can have an impact on now, simply by bringing more people into the insurance pool.

 

Your numbers for the single-payer proposal are misleading. You show it costing the state billions of dollars, but it will actually save money.

Our analysis shows that, if single-payer were enacted, total health care spending IN the state would decrease from about $30 billion annually to about $26 billion annually, mostly as a result of administrative savings. We do show an increase in spending BY the state of $15 billion a year, as private coverage and federal programs are absorbed into state spending.

 

 

Questions About Modeling

 

What assumptions are behind your cost and coverage analyses?

There are two distinct types of assumptions to consider. First, there are assumptions about impacts ¿ for example, how people and employers respond to price changes in insurance premiums, or the effects of increased access to primary care on emergency room utilization and total cost, etc. Assumptions like this were embedded in the model that our technical evaluation firm developed and has used in many other states, and were applied consistently across all proposals. They were based on the research literature and on real-world experience with similar programs or program features. 

 

Second, there are assumptions about what is broken and what needs to be fixed. That differed in each proposal, and led to different decisions about strategies to pursue. We found that proposers, including the Commission, often revised their assumptions about how to approach health reform¿ for example, premium subsidy levels or income qualifications for public programs ¿ based on feedback from the economic analysis.

 

Finally, it's important that we clarify terms. Assumptions about impacts and approaches are not the same thing as data inputs ¿ that is, information about how many people are covered by Medicaid, how much health care providers increase their rates for private insurers to compensate for underpayments by public programs and the uninsured, etc. Wherever possible, our technical evaluation firm used Colorado-specific data from public agencies and stakeholder associations. They tried to minimize the need to draw conclusions based on national data sets.

 

Does the $30 billion estimate of state spending include uncompensated care?

No; uncompensated care was calculated separately. Our evaluation firm defines it as free care provided to uninsured individuals, and calculated it at approximately $777 million annually.

 

 

Questions About the Commission

 

How much did the Commission cost taxpayers?

Most of the Commission's budget came as contributions from nonprofit foundations, not from public dollars. Only 9 percent of our budget came from the state, and a similar amount came from corporate and individual contributors.

 

Why did it cost so much?

This was a project that took more than a year and had many moving parts. In fact, we ran a very lean operation. A significant expense was the technical evaluation of the five proposals. We hired a consulting firm that is expert at this type of evaluation to perform multiple rounds of analysis on five proposals; that cost about $300,000. Our other major expense was consultants and staff.  We had two technical advisors who helped develop and oversee our processes for selecting proposals, evaluating them and developing the Commission's proposal. We had a communications consultant who developed materials, worked with the media and helped with our community outreach. We had a full-time project coordinator who coordinated all our activities and raised money. She had an assistant and occasional part-time help.