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News

Nov 2, 2016

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Bethany Pray serves as CCLP's Chief Legal and Policy Officer. Her areas of expertise include regulatory analysis and advocacy for Medicaid and commercial coverage, access to behavioral health benefits, Medicaid eligibility and much more.Staff page ›

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Are we getting our money’s worth from the ACA?

by | Nov 2, 2016

Health

Signed into law in 2010, the Affordable Care Act (ACA) was designed to make affordable, quality health care available to all.  Since the passage of the ACA, the legislation has made a measurable, positive difference in Colorado.

According to recent data, almost half a million Coloradans have gained health insurance coverage, dropping the percentage of uninsured to 6.7 percent in 2015, and the coverage they get is comprehensive, including preventive care, emergency care, behavioral health care, reproductive health care, and more. Colorado had the third-largest gains in coverage for kids among all states, according to one report.  On top of that, a Colorado Health Foundation study found that the ACA’s Medicaid expansion has led to economic benefits and the creation of more than 31,000 new jobs.

Unfortunately, this good news is being drowned out by news about the high cost of health insurance plans offered on Exchanges nationally. On average, current premium costs for insurance products offered by Connect for Health Colorado will increase a staggering 24 percent in 2017 for those renewing plans.  The Colorado Commission on Affordable Health Care continues to investigate the basis for these increases, which includes pricing increases for hospital services and, to a lesser degree, prescription drugs. While these numbers sound daunting, many Coloradans could be paying substantially less by taking better advantage of programs that lower premiums and reduce cost-sharing.

Alarmingly, Coloradans are less likely than residents of virtually every other state in the U.S. to take the opportunity provided by the ACA to pay less and get better coverage.  Tens of thousands of Coloradans are leaving money on the table – either by forgoing insurance altogether because they aren’t aware of the help they could get, paying more than what’s necessary, or ending up with plans that are too expensive to use. Sadly, some who don’t get the help they need will drop coverage when they can’t pay their premiums.

How can qualifying for assistance make a difference?  Coloradans who earn up to 400 percent of the federal poverty level (FPL) may be eligible for premium tax credits (PTC), which can either lower monthly premium costs or be deferred and reduce what is owed later in taxes. The cost differential this year can be enormous, based on figures released by the Colorado Division of Insurance in the  2016 Wakely Report, and can result in some customers paying less for coverage in 2017 than they did in 2016. Premium figures below show dramatic differences in cost.

Metal Tier 2017 Monthly premium before subsidy (auto-renew) % Change over 2016 for premium before subsidy 2017 Monthly premium after subsidy % Change over 2016 for premium after subsidy
Gold $443 + 23% $270 + 4%
Silver $403 + 22% $136 – 5%
Bronze $378 + 25% $100 – 22%
Catastrophic $207* + 22% $215* +21%
Total $385 + 24% $126 – 11%

*Catastrophic plans are not eligible for federal subsidies.

What about help with those high deductibles and copays? According to the preliminary 2016 Wakely Report produced by the Division of Insurance and Wakely Consulting, almost 20,000 Coloradans who purchased insurance through Connect for Health in 2016 could have gotten cost-sharing reductions (CSR), but didn’t. So although they got covered, they may have felt that out-of-pocket costs made their coverage unusable.

CSRs are only available for silver plans, but the reductions can make silver plans as affordable as bronze or catastrophic plans (or even more so). CSR lowers enrollees’ out-of-pocket maximums and deductibles, or the amount they pay out of pocket before coverage kicks in for most services. In addition, CSR cuts copays or coinsurance that an enrollee pays, whether for prescription drugs, office visits, hospitalizations or other procedures.

If an enrollee’s income is under 250 percent of the FPL (meaning about $30,000 for a single person or slightly over $60,000 for a family of four) she can qualify for CSR.  That program could make a big difference in the costs associated with a silver plan. Figures below from the Kaiser Family Foundation show average savings in federal marketplace plans in 2016 for a single person with income between 151 and 200 percent of the federal poverty level.

Average out of pocket maximum, medical and prescription drugs combined Average deductible in plans with combined medical and drug deductible Average office copay, primary care Average office copay, specialty care Average copay for hospital facilities, per day
No CSR $6,160 $3,064 $28 $58 $639
With CSR $1,795 $709 $16 $37 $313

Clearly, CRSs can make a significant difference. A Commonwealth Fund study released this week notes that an individual who made $18,000 annually, roughly 150 percent of the FPL, would typically have to pay over a third of that annual income before they hit their out-of-pocket limit, but CSR would lower that amount to an average of $1,102 a year.

Why aren’t Coloradans getting this assistance?  Colorado is ranked last or close to last nationally in uptake of premium assistance and cost-sharing reductions. Our independent sensibilities are not likely to be the cause, since residents of our neighboring states have overwhelmingly chosen to use these resources to get better, more affordable coverage. Fellow Medicaid expansion states North Dakota, New Mexico and Nevada have rates of CSR uptake that are at least 60 percent higher than Colorado’s, and rates of PTC uptake that are between 11 percent and 44 percent higher.

One feature that distinguishes Colorado from nearly all other states and may depress uptake rates is that up to 45 percent of enrollees purchase insurance on the exchange without checking whether they qualify for assistance.  Some of those purchasers may in fact be eligible for assistance, judging by a recent study finding that many who purchase off-exchange have incomes that would entitle them to tax credits. On the federal marketplaces, in contrast, over 92 percent of buyers provide household and income information to allow screening for eligibility

In Colorado, some customers may be deterred from checking eligibility because of concerns about errors and delay, since eligibility is determined not by Connect for Health Colorado, but by the state’s unwieldy Colorado Benefit Management System (CBMS). While the non-eligibility path should continue to be available for those who are clearly over-income, or who prefer to defer their tax credits to the end of the year, it makes sense to devote the lion’s share of available resources to making coverage affordable for those with lower incomes.

While the appeal of the non-eligibility path may result in some consumers losing out, the larger problem may be consumer confusion. Some Coloradans may purchase products outside the exchange because they think they don’t qualify for assistance. Others who take the step of providing their financial information and getting the premium tax credit are not aware of the substantial benefit of buying a silver plan and getting cost-sharing reductions. An additional group is Coloradans who lose Medicaid or CHP+ coverage, but don’t shift to the Exchange to purchase insurance, either because notices are inscrutable or coverage appears to be unaffordable. As many as 150,000 such Coloradans who are “eligible but not enrolled” failed to make that transition during a two-year period.

What can we do about this? Anyone who purchases insurance on Connect for Health Colorado would be wise to check eligibility for assistance and, if found eligible for cost-sharing reductions, should always purchase a silver plan.

We need to make it easier for customers to see if they qualify for assistance, and to understand how premium subsidies and cost-sharing can turn an unaffordable plan into coverage that can be maintained and used without breaking the bank.  A new tool developed by Connect and CIVHC tailors plans to a customer’s expected health care use, but should be enhanced in the to show the benefits of CSR for eligible enrollees.

Concerted efforts need to be made now by policymakers and stakeholders, while Connect for Health Colorado is engaged in strategic planning, to ensure that the application and eligibility-determination processes are more user-friendly and less error-prone, and don’t trip up customers and those who assist them.

Much has been said about rising health insurance premiums, yet Coloradans who seek and qualify for assistance might be pleasantly surprised to find affordable options within their budget. And while the premium hikes have revived scrutiny of the ACA in making health care more affordable, policymakers should address how to maximize the benefits available to Coloradans, while taking a closer look at the factors driving up costs.

 

– Bethany Pray

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HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

Health First Colorado is the name given to Colorado’s Medicaid program. Medicaid provides public, low-cost health insurance to qualifying adults and children. It is an entitlement program funded by the federal, state, and county governments and is administered by counties in Colorado. Those who are required to pay must pay a small co-pay when receiving certain health care services.

State Department: Department of Health Care Policy and Financing

Eligibility: Most adults 18 to 64 are eligible for Medicaid in Colorado if their household income is at or below 133% of the federal poverty limit (FPL). Pregnant women are eligible with incomes of up to 195% FPL, while children under 18 may be eligible if the live in a household with income at or below 142% FPL. Some adults over 65 may also be eligible for Medicaid.

Program Benefits: Through Medicaid, low-income Coloradans are eligible for a range of health care services at little to not cost. Services provided include doctors visits, prescription drugs, mental health services, and dental care. Co-pays for certain individuals may be needed for certain services.

Program Funding and Access: Colorado funds our Medicaid program through state and federal dollars. Medicaid is an entitlement program, which means that all who are eligible for Medicaid can access the program, regardless of the funding level in a given year. This does not mean that it is always easy to access Medicaid, even when eligible. And since the program is administered by counties, funding levels for county staff and other administrative roles can make it easier or harder for Coloradans to access the program. On top of this, not all medical providers accept Medicaid which limits the ability of Coloradans to seek health services even if enrolled, such as if the nearest provider is a 2+ hour drive away.

Note: This data is from before the pandemic and does not reflect changes in enrollment rules during the COVID-19 pandemic and public health emergency.

Statewide Program Access 2015-19: Over the study period of this report, an average of 89.0% of the population at or below 133% of FPL (i.e., the population who is likely to be eligible for Medicaid) were enrolled in Medicaid in Colorado.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

The Supplemental Nutrition Assistance Program or SNAP helps low-income Coloradans purchase food by providing individuals and families with a monthly cash benefit that can be used to buy certain foods. SNAP is an entitlement program that is funded by the federal and state governments and administered by counties in Colorado.

State Department: Department of Human Services

Eligibility: Currently, Coloradans qualify for SNAP if they have incomes below 200% FPL, are unemployed or work part-time or receive other forms of assistance such as TANF, among other eligibility criteria. Income eligibility for SNAP was different during the study period of this report than today—it was 130% FPL back in 2019 for example. The US Department of Agriculture uses the population at or below 125% FPL when calculating the Program Access Index (or PAI) for SNAP. We follow this practice in our analysis despite Colorado currently having a higher income eligibility threshold.

Program Benefits: SNAP participants receive a monthly SNAP benefit that is determined by the number of people in their household and their income. Benefit amounts decrease as income increases, helping households avoid a sudden loss of SNAP when their incomes increase, even by a minor amount. Benefits are provided to an Electronic Benefit Transfer (EBT) card that can be used to purchase eligible food items, such as fruits and vegetables; meat, poultry, and fish; dairy products; and breads and cereals. Other items, such as foods that are hot at their point of sale, are not allowable purchases under current SNAP rules.

Program Funding and Access: SNAP, like Medicaid, is a federal entitlement program. This means that Colorado must serve any Coloradan who is eligible for the program. As such, funding should not be a limit to how many Coloradans can be served by the program. However, funding for administration of SNAP at the state and county level can limit the ability of county human service departments to enroll those who are eligible. Other program rules and administrative barriers can make it difficult for Coloradans to receive the benefits they are legally entitled to receive.

Statewide Program Access 2015-19: Over the study period of this report, an average of 61.1% of the population at or below 125% of FPL (i.e., the population who is likely to be eligible for SNAP) were enrolled.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

The Special Supplemental Nutrition Program for Women, Infants, and Children, also know as WIC, provides healthcare and nutritional support to low-income Coloradans who are pregnant, recently pregnant, breastfeeding, and to children under 5 who are nutritionally at risk based on a nutrition assessment.

State Department: Department of Public Health and Environment

Eligibility: To participate in WIC you must be pregnant, pregnant in the last six months, breastfeeding a baby under 1 year of age, or a child under the age of 5. Coloradans do not need to be U.S. citizens to be eligible for WIC. In terms of income, households cannot have incomes that exceed 185% FPL. Families who are enrolled in SNAP, TANF, Food Distribution Program on Indian Reservations (FDPIR), or Medicaid are automatically eligible for WIC. Regardless of gender, any parents, foster parents, or caregivers are able to apply for and use WIC services for eligible children.

Program Benefits: WIC provides a range of services to young children and their parents. These include funds to purchase healthy, fresh foods; breastfeeding support; personalized nutrition education and shopping tips; and referrals to health care and other services participants may be eligible for.

Program Funding and Access: WIC is funded by the US Department of Agriculture. The state uses these federal funds to contract with local providers, known as WIC Clinics. In most cases, these are county public health agencies, but that is not the case in all Colorado counties. Some WIC Clinics cover multiple counties, while others are served by multiple clinics. Private non-profit providers are also eligible to be selected as a WIC Clinic.

Statewide Program Access 2015-17: Between 2015 and 2017, an average of 52.2% of the population eligible for WIC were enrolled in the program in Colorado.

Financial Security:
Colorado Works

Colorado Works is the name given to Colorado’s program for Temporary Assistance to Needy Families or TANF. It is an employment program that supports families with dependent children on their path to self-sufficiency. Participants can receive cash assistance, schooling, workforce development and skills training depending on the services available in their county.

State Department: Department of Human Services

Eligibility: In general, Coloradans are eligible to enroll in TANF if they are a resident of Colorado, have one or more children under the age of 18 or pregnant, and have very low or no income. For example, to be eligible to receive a basic cash assistance grant through TANF, a single-parent of one child could not earn more than $331 per month, with some exclusions—and would only receive $440 per month (as of 2022). That said, there are other services provided by counties through TANF that those with incomes as high as $75,000 may be eligible for. In addition to these, participants in TANF are required to work or be pursuing an eligible “work activity” or work-related activity. Any eligible individual can only receive assistance if they have not previously been enrolled in TANF for a cumulative amount of time of more than 60 months—this is a lifetime limit that does not reset. Counties may have additional requirements and offer benefits that are not available in other counties in Colorado.

Program Benefits:  While the exact benefits that one is eligible for under TANF can vary, all qualified participants are eligible to receive a monthly cash payment, call basic cash assistance. Other than cash assistance, counties are have a lot of choice in how to use their TANF funding; generally a use of TANF funds is appropriate so long as it advances one or more of the four purposes of the program: (1) provide assistance to needy families so that children can be cared for in their own homes or in the homes of their relatives; (2) end the dependence of needy families on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies; and (4) encourage the formation and maintenance of two-parent families.

It is important to note that those eligible for TANF are also eligible for many of the other programs we’ve included in this report, such as SNAP, Medicaid, and CCCAP.

Program Funding and Access: Colorado funds its TANF program through funds received from the federal government through the Temporary Assistance for Needy Families block grant. Most of the federal funds are allocated by the state to counties, which are required to provide a 20% match of state funding. Federal and state rules allow the state and counties to retain a portion of unspent funds in a TANF reserve.

Statewide Program Access 2015-19: Over the study period of this report, an average of 50.7% of the population at or below 100% of FPL (i.e., the population who is likely to be eligible for TANF) were enrolled in TANF in Colorado.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

The Colorado Child Care Assistance Program provides child care assistance to low-income families and caregivers living in Colorado in the form of reduced payments for child care. It is a program funded by the federal, state, and county governments and is administered by counties in Colorado. The share owed by parents/caregivers is determined on a sliding scale based on the family’s income.

State Department: Department of Early Childhood Education

Eligibility: Counties set eligibility for families separately, but must serve families with incomes at or below 185% of the Federal Poverty Limit. Families accepted to the program are no longer eligible once their income exceeds 85% of the state median income. Parents or caregivers must be employed, searching for work, or engaged in another approved activity to be eligible for CCCAP. Parents and caregivers enrolled in Colorado Works (Temporary Assistance to Needy Families or TANF) or in the child welfare system are also eligible to participate in CCCAP. Generally, CCCAP serves families with children under 13, although children as old as 19 may be eligible under certain circumstances.

Program Benefits: If a family is eligible for CCCAP and has income, they may likely have to pay a portion of their child’s or children’s child care costs each month. The amount that families owe is based on their gross income, number of household members, and the number of children in child care in the household. As such, households tend not to experience a benefit cliff with CCCAP when they see their incomes increase

Program Funding and Access: Colorado funds the CCCAP program using federal dollars it receives from the Child Care and Development Block Grant program. The state allocates federal and state funds to counties using a formula that takes into account factors like current caseloads and the number of eligible residents. Assistance is available until the county’s funds are spent, so the number of families that can be served is often a function of how much funding is available and the income and composition of the household that applies. It is not uncommon for counties to overspend or underspend their allocations of funds. The state reallocates unspent funds from counties who underspent to those who overspent. While underspending could indicate a problem with the way a county administers its CCCAP program, it could just as likely be a sign that there are few providers in the county who participate in CCCAP—or a lack of providers generally.

Statewide Program Access 2015-19: Over the study period of this report, an average of 10.8% of the population at or below 165% of FPL and younger than age 13 (i.e., the population who is likely to be eligible for CCCAP) were enrolled in CCCAP.

Housing:
HUD rental assistance programs

The US Department of Housing and Urban Development (HUD) has three housing assistance programs that we look at together: Housing Choice Vouchers (Section 8), Project-based Section 8, and Public Housing. In Colorado, these programs provided assistance to over 90% of the households who received federal housing assistance from all HUD programs. Through federally funded, local or regional public housing agencies (PHAs) are the agencies that administer these programs, through not all are available in all counties. These are not the only programs available in Colorado that assist households afford the cost of housing, such as units funded through federal and state tax credit programs.

State Department: Department of Local Affairs

Eligibility: Generally, households with incomes under 50% of the area median income (AMI) of the county they live in are eligible for these rental assistance programs, although PHAs have discretion to select households with incomes at higher percentages of AMI. That said, HUD requires that 75% of new vouchers issued through the Housing Choice Voucher/Section 8 program in a given year are targeted to households with incomes at or below 30% of AMI. PHAs are also able to create criteria that give priority to certain types of households who are on waiting lists for these programs.

Program Benefits: These rental assistance programs help households afford the cost of housing by reducing their housing costs to around 30% of their household income. In the case of the Housing Choice Voucher program, the PHA pays the voucher holder’s landlord the remaining portion of the rent.

Program Funding and Access: Funding and access are both challenges for these rental assistance programs. In addition to limitations on the number of public housing units or housing vouchers a PHA can manage or issue, lack of funding compared to the need constrains the ability of PHAs to assist low-income households. In 2020, Coloradans were on waitlists for Housing Choice Vouchers for an average of 17 months. Waitlists also exist for the other rental assistance programs.

Statewide Program Access 2015-19: Over the study period of this report, an average of 21.1% of renter households with incomes at or below 50% AMI (i.e., the population who is likely to be eligible for HUD rental assistance programs) were living in subsidized housing.