Thirty-one proposals were submitted to the state’s Blue Ribbon Commission for Health Care Reform (often called the 208 Commission), which was established by the legislature in 2006. In May, four proposals were selected for further analyses of their cost and coverage impacts, the results of which will be presented to the commission July 17. This week, Colorado Confidential will take a close look at each of the four proposals.
Solutions for a Healthy Colorado is the proposal submitted by the Colorado Association of Health Underwriters, an organization of 500 health insurance agents and insurance company representatives. The organization promotes retaining a market-driven system for health insurance while increasing accessibility and reducing costs.
“We believe competition is a good thing,” said Barry Teeters, lead author of the proposal and an insurance broker.
The proposal includes a mandate for all individuals to carry insurance but does not require businesses to provide it for employees.
Teeters said it’s not realistic for many small businesses – especially those with seasonal workers – to pay for their employees’ insurance.
“It’s a huge burden that many employers just cannot take on,” he said. “It has a significant financial impact on small businesses, and that’s the backbone of our economy.”
continued…Teeters also stressed individual responsibility.
“If the goal is to provide coverage for all Coloradans, then it should be the responsibility of all Coloradans to obtain some kind of coverage,” he said.
To achieve the individual mandate, all insurance companies that sell individual insurance would have to offer a minimum core benefit policy that nobody could be denied. Those under 250 percent of the federal poverty level would receive state subsidies for all or part of their premiums. That level is currently $25,525 for an individual and $51,625 for a family of four. Workers who want to use their subsidies for employer-sponsored insurance could do so.
To pay for the subsidies, the proposal suggests a tax credit for individuals and companies that have insurance and a tax penalty for individuals who do not. It also includes a “junk-food” tax on food with little or no nutritional value, which would have the purposes of both generating revenue and encouraging healthy eating.
Teeters said a tax on junk food was more palatable than an income tax increase and it makes sense because obesity is a leading cause for people accessing health care.
“If a product truly has little nutritional value or no nutritional value, than why not tax it? We tax alcohol. We tax tobacco,” Teeters said.
To help consumers find an insurance plan that meets their needs, a Health Care Connector program would be established. The program would primarily be for people who qualify for Medicaid or other subsidies and would help them apply for that aid.
The proposal states that expensive medical procedures are over-utilized and suggests incentives for doctors and hospitals to contain costs.
Teeters said such a move would not prevent people from getting the care they need and that specific guidelines should be developed by the medical community.
The proposal includes implementing a standard system of quality measurements for doctors and hospitals and then using a standard pay scale based on those measurements that would be tied to the federal Medicaid Reimbursement Schedule. For example, doctors who attain certain quality measurements would be paid 130 percent of Medicaid Reimbursement Schedule cost of procedures. Others reaching higher quality measurements might charge 150 percent. While Teeters emphasized that the quality measurements should be developed by the medical community, doctors who sign contracts with insurance companies could potentially charge a higher percentage.
Teeters said such a system would make doctor and hospital bills more transparent.
“If I need an MRI, I should be able to identify how much it costs before I have it done,” he said.
Teeters said the proposal could find opposition in hospitals and supporters of single-payer, public insurance, but he thinks many medical professionals will be supportive.
So many groups have stakes in health care reform that coming up with a widely popular proposal is unlikely, he said.
“The best proposal would make everybody mad because everybody’s giving something up.”
Read: 208 Commission Proposal: Better Health Care for Colorado
The commission will likely also develop a fifth proposal incorporating different elements of the selected four and may use ideas from the 27 proposals that didn’t make the cut. A final report is will be presented to the Legislature by Jan. 31.