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.
A Plan for Covering Coloradans was submitted to the 208 Commission by the Committee for Colorado Health Care Solutions, an organization of doctors and health care professionals. Members were hand-picked based on their expertise and ability to separate themselves from their own vested interests, said Dr. Bruce Cooper, lead author of the proposal and medical director of the Health District of Northern Larimer County.
“Our number one goal was to cover everyone in the state with some kind of health insurance coverage,” Cooper said. “Our second goal was to create a fair and efficient way of doing that. Our third goal was to simplify the system as much as possible.”
continued…The proposal mandates that all individuals have health insurance and requires businesses to contribute to workers’ health insurance or pay an assessment. Federal law would likely prohibit the employer assessment from amounting to much, Cooper said. But he thinks it might encourage some employers that don’t currently offer insurance to do so, and it would bring in some revenue.
“It’s an amount that shouldn’t lead to strong resistance from employer groups,” he said.
Under the proposal, the private health insurance system would remain, but individuals, small businesses and large businesses would be grouped together in a single purchasing pool, regulated by a quasi-governmental board. Insurance companies could not deny coverage to anyone, and the pool would receive a community rate, meaning individuals couldn’t be charged more based on health risks.
Cooper said it is unfair when people have been diagnosed with an illness and their insurance premiums skyrocket.
“It’s going back to basically what insurance is for,” he said. “Pure community rating is the only fair way to go.”
Six to 10 standard benefit packages would be available through the pool to streamline choices for consumers, and prices would be set by insurance companies. Two of those packages would be geared toward low-income people eligible for subsidies.
“We’re requiring individuals to carry insurance. If you’re going to do that ethically, you have to ensure that it’s affordable,” Cooper said.
People with incomes under 400 percent of the federal poverty level would be eligible for subsidies on a sliding scale. Currently, that limit is $40,840 for an individual and $82,600 for a family of four.
Cooper said the limits are generous, but the source of the subsidies proposed are misunderstood.
“We have found multiple sources of evidence that would say it is very difficult for folks at that income level to contribute significantly to an insurance premium,” he said. “A lot of people read our proposal and think the government is responsible for the whole subsidy, but we’re including an employer subsidy.”
The proposal would expand eligibility for Medicaid with the goal of capitalizing on federal matching dollars. To pay for the expansion of Medicaid, the administrative costs of the purchasing pool and the premium assistance fund, the proposal suggests a premium tax on insurers or increases in other taxes such as alcohol and tobacco. The assessments on companies that don’t provide insurance would also create revenue.
The proposal also addresses bringing down administrative costs related to health care. It states:
We envision the Authority bringing all stakeholders together to create a single viable, simple billing and payment system, standardize forms and codes, and require insurers to streamline and simplify processes to lower administrative burden for providers. Electronic claims must be utilized by all insurers.
Although actual estimates are not available yet, Cooper said he knows his group’s proposal will be expensive, and those staunchly opposed to new taxes will be its most likely adversaries.
“It’s a three letter word that comes up with our proposal,” he said. “Major opponents are going to be people who fear any kind of increased government expenditure on behalf of universal coverage.”
Those who want to abolish private insurance in favor of a public, single-payer system probably won’t like the plan either, Cooper said. But, his organization is not inflexible in its view of health care reform.
“The folks on our committee are not necessarily married to our proposal,” he said. “But we are absolutely in support of the principles of the Blue Ribbon Commission.”
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.