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The Coverage of a Half Million Coloradans Comes Down to a Chart and the Court

Next month, the U.S. Supreme Court is set to hear a case that will decide the fate of health coverage for hundreds of thousands of Coloradans. And in the middle of a pandemic and recession — when many people need the security of coverage to access health care — the timing couldn’t be worse nor the stakes higher.

Over the past 10 years, Colorado has made strides in reducing the number of people lacking coverage. The state expanded Medicaid under the Affordable Care Act (ACA) and set up its own health insurance marketplace, Connect for Health Colorado. The gains can be summed up in the chart below, which shows the uninsured rate in Colorado falling from 14.3% in 2013 to 6.7% in 2015, reflecting the state’s implementation of many ACA provisions in 2014.

A Supreme Court decision against the ACA could almost entirely erase the gains Colorado made over the past decade. At issue is the constitutionality of the penalty imposed when someone doesn’t have health insurance, also known as the individual mandate. Currently, that penalty is set at $0, a change made in the 2017 tax legislation passed by Congress and signed by President Trump. The state of Texas — joined by 20 other states — sued after the 2017 change, arguing that setting the penalty to $0 made the entire ACA unconstitutional.

The Trump administration sided with the plaintiffs and stopped defending the ACA — a highly unusual move because the federal government typically seeks to uphold a federal law. The state of California — joined by 20 other states including Colorado — is now serving as “state intervener-defendants” of the ACA in California v. Texas, the case set to be heard before the Supreme Court on November 10.

The Court will examine three basic issues:

  • Do the parties have standing to bring the case in the first place?
  • If so, is the individual mandate unconstitutional?
  • If found unconstitutional, is the individual mandate severable from the rest of the ACA?

If the Court determines that the individual mandate is unconstitutional AND cannot be severed from the rest of the ACA, then the entire law will likely be struck down.

The implications of this scenario are vast and complicated. Take the Medicaid expansion. Should the Supreme Court overturn the ACA, the 90% federal match for funding Colorado’s Medicaid expansion would be eliminated. And although the state’s 10% share is currently covered by a fee on hospital services — and not the state’s general fund — it would be nearly impossible for the state to cover the other 90%, especially with an economy and state budget ravaged by the pandemic.

Eliminating the Medicaid expansion would harm the ability of hundreds of thousands of Coloradans to get needed care. It would all but guarantee that nearly 400,000 adults would lose coverage.[1] Many of these Coloradans have relatively low incomes and are likely to have been hit hardest by the pandemic. CHI estimates that Colorado’s uninsured rate would increase from 6.5% to 12.9% — more than one in 10 Coloradans — if all current Medicaid expansion enrollees became uninsured.[2]

The Medicaid expansion is just the tip of the iceberg. An additional 114,000 Coloradans would lose federal financial assistance to secure coverage purchased through Connect for Health Colorado.[3] Many others might lose their private insurance because the ACA’s guarantee of coverage for people with pre-existing conditions would be repealed.

Numerous other provisions of the ACA would be in jeopardy, including the elimination of the Medicare prescription drug coverage gap (commonly called the “donut hole”), the ability to keep young adults on parents’ coverage until age 26, and funding for some types of safety net clinics. Eliminating the numerous ACA provisions affecting hospitals and the insurance industry will likely cause uncertainty and disruption in health care markets.

The Supreme Court’s role in the fate of the ACA does nothing but raise the stakes of events to happen over the next month. In the election, if Democrats win the presidency and a filibuster-proof majority in the Senate, there is a chance they could make a legislative fix before the Court announces its decision in 2021. The confirmation of Judge Amy Coney Barrett may sway the Court further against the ACA. And the growing number of uninsured in Colorado due to mounting pandemic-related job losses would only be exacerbated by an overturned ACA. 

CHI is both looking back and looking ahead to understand the implications of an overturned ACA. CHI’s series Unfinished Business published earlier this year outlines the impact of the ACA on Colorado. CHI is also planning an update to its popular ACA matrix that will identify what ACA-related measures Colorado policymakers have already codified in an attempt to secure coverage and access for people living in the state. And we will continue to monitor developments and provide sound analysis of the implications, whatever the future holds for the ACA.

 


[1] CHI calculation of FY 2020-21 Medicaid expansion category caseload figures taken from: Colorado Department of Health Care Policy and Financing (2020). “Exhibit J – Healthcare Affordability and Sustainability Fee Cash Funded Populations and Supplemental Payments.” FY2021-22 Budget Request. https://www.colorado.gov/pacific/sites/default/files/HCPF%2C%20FY21%2C%20R-1%20Exhibit%20J.pdf

[2] CHI estimate based on 2020 Colorado Demography Office total population forecast; HCPF (2020) Exhibit J; and 2019 Colorado Health Access Survey uninsured estimate. Does not include influences on the uninsured rate due to economic conditions, population growth, or other factors.

[3] Connect for Health Colorado (2020).

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