May 25, 2016

Allison Neswood previously served as CCLP's Deputy Director of Strategic Priorities. She is an expert in public health insurance plans (Medicaid and CHP+), Aid to the Needy Disabled, immigrant access to services and health equity.

Recent articles

CCLP testifies in support of Clean Slate updates

Bethany Pray, CCLP’s Chief Legal and Policy Officer, provided testimony in support of House Bill 24-1133, Criminal Record Sealing & Expungement Changes. CCLP is in support of HB24-1133, as it is one of our priority bills.

CCLP testifies in support of TANF grant rule change

CCLP's Emeritus Advisor, Chaer Robert, provided written testimony in support of the CDHS rule on the COLA increase for TANF recipients. If the rule is adopted, the cost of living increase would go into effect on July 1, 2024.

Case could implicate ‘Obamacare’

by | May 25, 2016

Earlier this month, a D.C. federal district court judge ruled that the Obama administration improperly funded an Affordable Care Act (ACA) program that reduces out-of-pocket health insurance costs for low- to moderate-income people. The lawsuit, House of Representatives vs. Burwell, was filed in November 2014 by the House of Representatives, which is the plaintiff in the case.

The ACA provides two types of financial assistance for plans purchased through a health insurance exchange: premium tax credits and cost-sharing reductions. The ruling concluded that the Obama administration could not continue to fund cost-sharing reductions because there had never been a congressional appropriation for that program. The ruling does not affect funding for premium tax credits.

Premium tax credits reduce premium costs and are available to individuals in households that earn between 100 percent and 400 percent of the federal poverty level (FPL). Cost-sharing reductions reduce deductibles, copays and coinsurance and are available to individuals who purchase “silver” plans, are eligible for tax credits, and earn less than 250 percent of the FPL, which in many parts of Colorado is less than the income needed to be self-sufficient.

Cost-sharing reductions can significantly reduce the amount individuals pay in order to receive care. As outlined in an article from Kaiser Health News, a family of four whose income is between 100 and 150 percent of the FPL ($23,550 to $35,325) will be responsible for paying 6 percent of covered expenses out-of-pocket compared with the 30 percent that a family not getting cost-sharing reductions would owe in a silver plan. A family with an income between 150 and 200 percent of the poverty level ($35,325 to $47,100) will be responsible for 13 percent of expenses instead of 30 percent, and one with an income between 200 and 250 percent of the FPL ($47,100 to $58,875) will be responsible for 27 percent of expenses instead of 30 percent.

Both the premium tax credit and the cost-sharing reductions programs are authorized under the ACA but the House of Representatives argued that Congress never appropriated monies to fund the cost sharing reductions program. Ruling in favor of the plaintiffs, a federal district court judge in the Washington D.C. circuit agreed that Congress had never made such an appropriation.

Federally funded programs require both authorization from Congress and a congressional appropriation of funds. The appropriation for the premium tax-credit program was included in a section of the United States Code that provides a permanent recurring appropriation for certain tax refunds and programs under the tax code. The administration argued that the appropriation for the cost-sharing reductions program was included under the appropriation to the tax-credit program. But the judge disagreed, ruling that the plain language of the appropriation clause demonstrated otherwise.

The ruling, which enjoins the federal Department of Health and Human Services (HHS) from expending any additional money on the cost-sharing reductions program, will have no immediate effect because the judge stayed the effect of her decision pending any appeals. Additionally, even if the plaintiff is ultimately successful, consumers will not lose the cost-sharing reductions they currently receive as a result of this case.

That is because the cost-sharing reductions program requires insurance carriers to reduce the cost-sharing obligations of individuals who purchase silver plans and meet the income eligibility requirements. That obligation on insurance carriers is not being challenge and will not go away as a result of this case. The ACA requires HHS to reimburse insurance carriers for the cost-sharing reductions they provide and it is those back end reimbursements that will have to discontinue if the plaintiff is ultimately successful.

What is less certain is how the carriers will deal with the discontinuance of the federal reimbursements. It is reasonable to expect an increase in premiums. As outlined by The New York Times, a study by HHS estimated that premiums for silver plans could rise by 30 percent without cost-sharing reimbursements. Premium increases will make health insurance more expensive for insured individuals that do not receive premium tax credits. But for those beneficiaries that receive tax credits, the impacts on affordability will be mitigated because the tax-credit program is designed to keep premium costs to the individual at a fixed percentage of household income.

Therefore, while HHS would no longer be permitted to expend funds on cost-sharing reimbursements if the House of Representatives wins the case, increasing premiums would cause expenditures on tax credits to increase. As also noted by The New York Times article, the Urban Institute estimates that additional spending for premium tax credits would total $3.6 billion in 2016 and $47 billion over the next decade.

Not everyone thinks premium increases are inevitable, however. Responding to The New York Times story, another article points out, that insurance companies should be able to sue for the reimbursements they are owed under the cost-sharing reductions program — potentially avoiding the need to raise premiums in the long run. The article notes that whether or not there is an appropriation for cost-sharing reductions, the statutory obligation HHS has to reimburse the insurance carriers is enforceable in the Court of Federal Claims. Therefore, lawsuits by the carriers would likely be successful and Congress has permanently appropriated money to pay court judgments.

Even so, it is unlikely that a ruling in favor of the plaintiffs will be easily or quickly resolved through litigation. We hope, in the event that plaintiffs prevail, that Congress will fund this critical affordability program it already authorized.

For now, the administration has indicated its intention to appeal the decision to the D.C. Circuit Court of Appeals. We will continue to watch the case as it moves through the appeals process.

– Allison Neswood

Recent articles

CCLP testifies in support of Clean Slate updates

Bethany Pray, CCLP’s Chief Legal and Policy Officer, provided testimony in support of House Bill 24-1133, Criminal Record Sealing & Expungement Changes. CCLP is in support of HB24-1133, as it is one of our priority bills.

CCLP testifies in support of TANF grant rule change

CCLP's Emeritus Advisor, Chaer Robert, provided written testimony in support of the CDHS rule on the COLA increase for TANF recipients. If the rule is adopted, the cost of living increase would go into effect on July 1, 2024.

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

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

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.