Source: Colorado Politics
Democratic lawmakers are pushing legislation that would place a cap on what the state’s employee benefit plan pays for medical services from hospitals in large metropolitan areas.
Since state employee premiums are partially paid for through the state’s General Fund, the savings to the fund incurred by the cap would be redirected to safety net providers, which provide care for patients who are uninsured, low-income, or have limited access to health care.
The bill, which has yet to be officially introduced, would also reduce premiums in the small group market and is set to go into effect around 2027, sponsors said, adding it would support Colorado’s “safety net” providers and save state employees money on their health insurance premiums.
Colorado Democrats have passed a number of measures they said would lower the cost of healthcare in recent years, according to Rep. Kyle Brown, D-Louisville, one of the sponsors. The other proponents are Sens. Jeff Bridges, D-Greenwood Village and Iman Jodeh, D-Aurora, and Rep. Emily Sirota, D-Denver.
Brown said that included capping the price of insulin, capping interest rates on medical debt, and the state-run insurance marketplace, Colorado Option.
“One thing is abundantly clear to me, and that’s that to address healthcare affordability in Colorado, we have to address hospital prices and prevention needs to be part of the conversation,” said Brown. “Coloradans are counting on us to make accessing healthcare easier and more affordable, and this bill protects our critical safety net providers, cuts healthcare costs, and ensures our community members can receive high-quality care.”
Clinica Family Health and Wellness president and CEO Simon Smith said more than 40% of Clinica’s 60,000 patients are uninsured, and 65% of the state’s community health centers are currently operating with negative margins due to a combination of inflation, low provider retention, and Medicaid unwinding following the pandemic. He said small health care centers, such as Clinica, have been forced to make difficult decisions due to lack of funds, such as cutting services and laying off staff.
“This bill will be transformative for ensuring community health centers will continue to provide affordable primary care to Coloradans across the state,” he said.
According to Sirota, the average Coloradan with commercial insurance pays three times the amount Medicare pays providers for its patients. Hospital margins would decrease by about half a percentage point if the bill is implemented, she said, citing similar measures passed in Oregon and Montana.
Sirota cited a Brown University study that found Colorado could save up to $2 million a year if it implemented a reimbursement maximum for state employees.
Lieutenant Governor Dianne Primavera called the bill a common-sense solution that prioritizes affordability and access.
“Too many people have had to make the impossible choice between getting the care they need and being able to afford groceries for the week,” she sad. “This isn’t a new issue; it’s been a persistent challenge for far too long.”
Earlier this month, the Colorado Hospital Association issued a statement urging lawmakers to be cautious when considering healthcare legislation this session due to “unprecedented uncertainty and financial instability” at the federal and state levels.
“With this amount of uncertainty and financial threat, experimenting with policies that would reduce the resources needed to provide care to Coloradans is a risk we cannot take,” said CHA president and CEO. “We must avoid further destabilization of our health care ecosystem.”
Seventy percent of Colorado hospitals are struggling financially, said Julie Longborg, CHA’s senior vice president. Despite the bill’s sponsors saying it will not lead to cost shifting, Longborg says it will, and those costs will be passed on to patients. If cost shifting doesn’t occur, then hospitals will have to figure out how to reduce costs in another way, which often results in cutting programs, like Smith mentioned.
“I cannot begin to fathom why [the sponsors] believe that, because a state agency just 10 days ago put out a report that shows how the cost shift works and shows that we have made tremendous progress in reducing cost shift,” said Longborg. “So I am befuddled as to why Brown would say something doesn’t exist when a state agency reported on it just 10 days ago.”
While margins decreasing by only half a percentage point may not seem like much, Longborg said it can have a devastating impact on hospitals that are already in the red. Based on CHA’s preliminary analysis, the bill would reduce hospital revenue by $170 million a year.
“Hospitals are already struggling financially, so that further pressure on their revenues is really problematic on top of the unprecedented uncertainty out of the federal government,” she said.
Longborg said she agrees that the cost of providing and receiving health care in Colorado is far too high, but she doesn’t believe that rate setting will solve anything. CHA and several other healthcare organizations are working on a list of alternate solutions, which they will publicize when it’s finished.
“We had conversations with members of the Joint Budget Committee and the Department of Health Care Policy and Financing and we’ve had conversations with the Governor’s Office,” she said. “The state asked us to try to help find about $100 million in savings, and we’re gonna try to do better than that with our ideas so that we they have some things to choose from.”
