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Colorado Legislators Consider New Medicaid Model

February 21, 2014

Colorado’s Medicaid program has grown significantly since the legislature approved Medicaid expansion last year, welcoming thousands of newly-eligible enrollees. We are seeing several bills during this session that aim to improve and streamline the Medicaid program, including House Bill 14-1115, which the House Public Health Care and Human Services Committee passed this week.

House Bill 14-1115 would investigate the viability of establishing a premium assistance pilot program for Colorado’s Medicaid enrollees. These types of programs typically involve using state funds to place Medicaid enrollees in a private insurance plan purchased through the insurance marketplaces.

Several states, including Arkansas and Iowa, plan to implement premium assistance programs as an alternative to traditional Medicaid expansion under the Affordable Care Act. Because these programs use federal Medicaid funds in ways not permitted under current law, states must secure an 1115 waiver from the Centers for Medicare & Medicaid Services.

To be clear, House Bill 14-1115 as currently amended would only require the Colorado Department of Health Care Policy and Financing (HCPF) to conduct a study to determine whether this type of program could be an effective model for Colorado. It does not seek to implement the program at this time.  

The bill’s sponsor, Rep. Amy Stephens (R- Monument), expressed concerns in her testimony about the future of Medicaid in Colorado, both in terms of growing costs to the state and adequate access to health care providers for Medicaid enrollees. She recognized the efforts of the Accountable Care Collaborative in the Medicaid program to deliver care more efficiently, but she urged lawmakers to look into other solutions as well.

“We have to have more than one route to address these issues,” said Stephens. “This study may yield some interesting results that allow you and other leaders to plan for the future.”

Stephens suggested that the study could determine whether moving Medicaid enrollees into private plans would help to address provider shortages. She cited the Colorado Health Institute’s new study of the Primary Care Workforce, which showed that nine of the state’s 21 health statistics regions fall below a benchmark ratio of Medicaid enrollees to full-time primary care physicians who treat Medicaid patients.

Stephens also argued that a premium assistance program could help to address issues of “churn” in the Medicaid program, which happens when eligibility changes due to fluctuations in income or other changes. She said that people who are eligible for Medicaid but are enrolled in private plans could stay in private coverage if their income changed, providing more seamless coverage and care.

Stephens also said she hoped that the bill would allow the state to evaluate potential cost savings. Data on the cost effectiveness of premium assistance programs is limited, so it’s unclear whether they can save money. Some smaller-scale premium assistance programs implemented in other states, such as Rhode Island and New Jersey, have documented cost savings, although these programs used employee-sponsored insurance to cover a portion of premium costs, which is different from the proposal that would be evaluated in Colorado.  

The Colorado Association of Family Physicians testified in support of Rep. Stephen’s bill. Two members of Colorado’s disabled community spoke in opposition, expressing concern that any privatization of public insurance programs would be detrimental to patients. Some lawmakers expressed concerns that HCPF would not have the resources to adequately implement the program, should they decide to move forward with it. The department is currently neutral on the measure.

The measure passed by a vote of 7-5. Voting in favor were Rep. Kathleen Conti (R), Rep. Justin Everett (R), Rep. Lois Landgraf (R), Rep. Dianne Primavera (D), Rep. Jonathan Singer (D), Rep. James Wilson (R) and Rep. Stephens (R).  Voting against it were Rep. Joann Ginal (D), Rep. Beth McCann (D), Rep. Sue Schafer (D), Rep. Max Tyler (D) and Rep. Dave Young (D). Rep. Janak Joshi (R) was absent. The bill now heads to the Appropriations Committee, where it is expected to be heard in the coming weeks.