Colorado House Republicans Tuesday introduced a bill to enable Colorado to opt out of participation in the Affordable Care Act. The bill would cause Colorado to join in an interstate compact with several other states that do not want to participate in the federal health care plan.
The compact would have to be approved by both the United States Senate and House, but would not have to be signed by President Obama.
This, one week after a study released by The Colorado Trust estimates that the passage and implementation of the Affordable Care Act will render huge economic benefits to Colorado over the coming years.
Among the study’s conclusions are that the full implementation of the Act will lead to the creation of 19,000 new jobs in Colorado by 2019. It also estimates an increase in GSP (gross state product) of $3.8 billion annually by 2019, with 59% of that increased productivity coming from outside the health care sector.
The study, which was corroborated independently by the University of Denver prior to publication, says that by 2019 the ACA will save the average individual about $2000 a year in lower health insurance premiums, and will save the average family about $4000.
The study estimates that about 500,000 more Coloradans will have health insurance in 2019 with implementation of the Act, than if the Act is not fully realized.
Uncompensated care will be reduced as more Coloradans become insured. In its 2009 study, the Urban Institute predicted that uncompensated care in Colorado would have cost $1.8 billion dollars in 2019 without reform. Their research estimates that by 2019 the ACA will provide coverage to between 412,201 and 586,914 Coloradans through the expansion of Medicaid to 133% of the Federal Poverty
Level (FPL), coupled with subsidies for people up to 400% of FPL to make the purchase of private insurance more affordable.
With more insured patients, hospitals will not need to raise private rates as much to make up for unpaid medical bills. As a result, private payers will bargain for new, lower rates in the context of greater coverage levels. Private payers will not be able to reduce the amount they pay hospitals by the exact amount that hospitals will gain through having more insured patients. This is due principally to the substantial negotiating leverage held by providers over private payers. Therefore, the New American Foundation study conservatively assumed that private payers can effectively negotiate hospital rates that recapture 40% to 75% of the reduction in uncompensated care costs.
Mitigating these costs will mean that private premiums should be reduced by more than 2% by 2019.
The Healthcare Opportunity & Patient Empowerment (HOPE) Act would allow Colorado to opt out of the federal Patient Protection and Affordable Care Act (PPACA) by joining an interstate compact which, once approved by the U.S. House and Senate, would supersede prior federal law and give regulatory authority to the states in the compact, says GOP House leadership.
Republican House Majority Leader Amy Stephens, Majority Whip B.J. Nikkel and Senate Republican Leader Mike Kopp are the bill’s sponsors.
Republican House Majority Leader Amy Stephens said, “We need to discuss creative ways to move the health care debate forward… Most importantly, this conversation must be founded on the principles of promoting the free market and consumer choice.”
“The U.S. Constitution allows Colorado and other states to form interstate compacts which, once approved by Congress, give them complete regulatory authority outside federal law,” said Senate Republican Leader Mike Kopp. “We believe health care decisions should be made on the local level, not by bureaucrats in Washington.”
Senator Kopp and Representative Stephens say they are in discussions with legislative leaders in several states. Arizona, Montana, North Dakota, Missouri, and Tennessee have already introduced compact legislation, and leaders in Texas and Florida are considering it.
If the compact is approved by Congress, the signatory states would become responsible for the regulation of health care within their own jurisdictions without federal mandates.
House Minority Leader Sal Pace (D-Pueblo) put out the following statement regarding House Republican efforts to squash the Affordable Care Act.
“This is clearly just political posturing by a Republican party that’s more interested in throwing red meat to their base than governing. House Democrats are committed to fighting to put out-of-work Coloradans back into good jobs, and we call on House Republicans to do the same. Enough games, let’s do what the people of Colorado elected us to do – balance the budget the right way, help get people back to work, and steer our state towards prosperity.
“The Affordable Care Act is only just beginning to be implemented in Colorado. The wisest decision we can make as a state is to give the Act a chance to work here before we try to dismantle it.”