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News

Aug 26, 2019

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Letter: Regarding Recommendations for HB 1004 State Coverage Option

by | Aug 26, 2019

CCLP Statement, News

The following letter was sent to DHCPF Executive Director Kim Bimestefer, and Division of Insurance Commissioner Michael Conway, on August 26, 2019. (PDF version available here)

Re: Recommendations for HB19-1004, State Coverage Option

Dear Executive Director Bimestefer and Commissioner Conway:

The Colorado Center on Law and Policy (CCLP) submits the following comments regarding a state coverage option that will meet the requirements of HB19-1004, serve existing need in Colorado, and help address existing inequities in access to care. The nonprofit Colorado Center on Law and Policy uses research, education and policy advocacy to remove the systemic barriers that prevent Coloradans from meeting their basic needs and achieving better health.

These comments are intended to align with principles expressed in the joint letter submitted on behalf of over 20 consumer groups (joint letter), including CCLP, submitted July 22, 2019. The state has invited feedback in three areas: eligibility and population to whom the state option will be made available; affordability considerations; and state health infrastructure that should be utilized. We expand on those three areas below and add a fourth, regarding transparency and accountability of a state option.

Eligibility and population

CCLP believes that the state coverage option should be accessible to all Coloradans, regardless of income, region, or immigration status. When individuals lack access to coverage, they are less likely to get preventative care and services for major health conditions and chronic diseases, more likely to have adverse events when they receive hospital care, and have increased mortality.1 When those individuals receive care for which there is no compensation, hospitals may respond by raising prices, adding to financial burdens on other individuals and employers.

The high cost of coverage for Coloradans ineligible for premium tax credits, particularly in the mountain corridor and Western Slope, has been a focal point of public discussion since at least 2014.2 3 4 Testimony and reports by elected officials and residents of those areas clearly established the impact of high premium costs on the local economy and individual lives, despite incomes significantly above poverty.5

However, the greater proportion of individuals nationally and in Colorado who lack coverage have lower incomes.6 The option should not be limited to those above 400 FLP because doing so would have the effect of increasing existing disparities. In 2017, 66 percent of the uninsured in Colorado had incomes between 100 and 399 FPL, three times the number of uninsured Coloradans with incomes of 400 FPL and above. Those lower-income households also spend a larger share of income on necessities such as housing, food and child care, leaving them particularly vulnerable to debt and bankruptcy when medical costs are encountered.

In order to ensure that a state coverage option serves the interests of Coloradans, it is also important to consider demographics and immigration status. Hispanic households have the highest uninsured rates of any racial or ethnic group7 – despite many Colorado households’ eligibility for subsidized coverage or public programs.8 A 2018 report by the Center for Health Progress also noted that a quarter of Colorado’s uninsured population, just over 100,000 individuals, were people who lacked documentation of legal status.9 Due to recent federal actions and rhetoric,10 households that include non-citizens may be less likely to access coverage even if some or all household members are eligible for tax credits or other assistance; by permitting access regardless of immigration status, the state has an opportunity to set a different tone and support a healthier future for Colorado communities.

Last, those who are already covered but seek an option that is more affordable in terms of premium cost or plan structure, or that potentially offers greater transparency, should have access to a state coverage option.

Affordability considerations

As stated in the joint letter, we support a view of affordability that encompasses both premiums and cost-sharing, with the overall goal of providing affordable access to health care services. We also support plan benefit structures that allow greater access to non-acute services and provide more predictability, so that consumers can get care before problems become acute and can identify and budget for health-related expenses.

Premiums

Due to the ACA definition of affordability and the complexity of plan structures, premium levels are typically the main consideration for consumers when they shop for plans.11 There is reason for optimism in Colorado regarding premium prices overall in the individual market because of the recently approved reinsurance plan and resulting forecasts.12 That said, premiums pose a substantial initial hurdle to acquiring coverage and affect perceptions of affordability, and premium costs should remain an important factor in the state definition of affordability.

Cost-sharing levels and predictability of costs

Deductibles and cost-sharing are obstacles to access to treatment even for those who are able to purchase coverage, and it is essential that the state coverage option provides not just access to coverage but access to care. Current analysis of deductible affordability suggests that access to health care services is hampered by the presence of larger deductibles, with almost a third of enrollees in family plans with deductibles above $2,700 reporting that they delayed care due to costs.13 Colorado’s average deductibles are significantly higher, with bronze plans deductibles exceeding $12,000 for a family.

While not all families will exhaust their full plan deductible, those with chronic conditions, who have made a visit to the emergency department or have experienced a major health event are likely to do so. Very few have existing resources sufficient to cover those amounts,14 and research by CCLP suggests that large numbers of Coloradans lack annual income – let alone income over a shorter period – sufficient to cover the cost.15 Excluding Medicaid-enrolled families, close to half of working-age families in sixteen southern Colorado counties would have insufficient income to cover an average silver plan deductible over the course of three months. The situation for bronze-plan purchasers – who would not have access to cost-sharing reductions – is even more troubling.

One effect of unpredictable and high cost-sharing is avoidance or deferral of less acute care needs, which would potentially result in the same or similar negative outcomes as those described above for individuals who lack coverage altogether. Providing pre-deductible coverage for primary care or establishing cost-sharing structures in a state coverage option that allow access to non-acute services, including primary care and maintenance medications, should be a priority.

State health Infrastructure

CCLP interprets state infrastructure to mean assets held by the state that can be utilized to create efficiencies that will help lower the cost of coverage. We support use of the state exchange, Connect for Health Colorado, and its public benefit corporation, so long as those structures will allow all Coloradans – regardless of income, region or immigration status – to purchase coverage. We emphasize a point raised earlier in the joint letter, that the existing individual market health coverage application used by the Division of Insurance improperly requires a social security number (SSN), potentially allowing discrimination on the basis of national origin. That application needs immediate revision, and such information must be optional for a public coverage option offered off-exchange.

CCLP also recommends that state consider use of the Medicaid and CHP+ provider networks as a way to provide continuity of care for populations that may move between Medicaid, CHP+ and the individual market, and as a way to create a second income stream for providers with Medicaid caseloads.

Transparency and Accountability

A last consideration is the transparency of the state coverage option, both in its creation and its ongoing functions. One significant benefit of public programs such as Medicaid or CHP+ is that structures, medical necessity criteria, and financing have a high level of transparency. The public can hold those programs accountable; individuals can get information about services that are covered and can better understand the basis for providing care and challenge denials of care. It is CCLP’s position that a coverage option that is made possible through state action should have a mechanism for ongoing public engagement and provide opportunity for public scrutiny of benefit design, utilization management and provider inclusion criteria, among other factors.

Thank you for the opportunity to comment. We look forward to continued discussions about the public coverage option over the coming months.

Regards,
Bethany Pray, Esq.

1 Care Without Coverage: Too Little, Too Late. Chapter 3: Effects of Health Insurance on Health. Institute of
Medicine (US) Committee on the Consequences of Uninsurance. Washington (DC): National Academies Press
(US); 2002. https://www.ncbi.nlm.nih.gov/books/NBK220636/

2 Electa Draper, The Denver Post. Colorado mountain towns pay highest health premiums in U.S. February 8, 2014,
updated April 27, 2016.

3 Jordan Rau, Kaiser Health News. The 10 Most Expensive Insurance Markets in the U.S., February 3, 2014.

4 Rates on a Roller Coaster, CHI, October 2015.
https://www.coloradohealthinstitute.org/sites/default/files/migrated/downloads/2016_Rate_Analysis_3.pdf

5 Christie Aschwanden, The Healthiest State in the Country Has Some of the Steepest Premiums. Nov. 13, 2017.
FiveThirtyEight.https://fivethirtyeight.com/features/the-healthiest-state-in-the-country-has-some-of-the-steepestpremiums/

6 Kaiser Family Foundation, Key Facts About the Uninsured Population. Dec 7, 2018.
https://www.kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/

7 Profile: Hispanic/Latino Americans. U.S. Department of Health and Human Services Office of Minority Health.
https://minorityhealth.hhs.gov/omh/browse.aspx?lvl=3&lvlid=64

8 Colorado’s Eligible but Not Enrolled Population Continues to Decline. Colorado Health Institute, June 29, 2017.
https://www.coloradohealthinstitute.org/research/colorados-eligible-not-enrolled-population-continues-decline

9 Immigrant Health in Colorado Population Demographics and Insurance Status. Center for Health Progress.
February 2018. https://centerforhealthprogress.org/blog/publications/immigrant-demographics/

10 Andy J. Semotiuk, Immigrants Troubled by Trump’s New Immigration Policy Restrictions. Forbes. August 23,
2019. https://www.forbes.com/sites/andyjsemotiuk/2019/08/23/immigrants-troubled-by-trumps-new-policyrestrictions/#47f5c1163b34

11 Erin Taylor, Katherine Carman, Andrea Lopez, Ashley Muchow, Parisa Roshan, Christine Ebner. Consumer
Decisionmaking in the Health Care Marketplace. Rand Corporation, 2016.
https://www.rand.org/content/dam/rand/pubs/research_reports/RR1500/RR1567/RAND_RR1567.pdf

12 Reinsurance Program, HB1168 and 1332 State Innovation Waiver Application. Colorado Division of Insurance
web page. https://www.colorado.gov/pacific/dora/reinsurance-program

13 Paul Fronstin, Edna Dretzka. Issue Brief: Consumer Engagement in Health Care: Findings from the 2018
EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey, Dec. 13, 2018. P. 16,
https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_468_cehcs-20dec18.pdf?sfvrsn=effc3e2f_6

14 Matthew Rae, Gary Claxton, Larry Leavitt. Do Health Plan Enrollees Have Enough Money to Pay Cost-Sharing?
Kaiser Family Foundation,.Nov. 3, 2017. https://www.kff.org/health-costs/issue-brief/do-health-plan-enrolleeshave-enough-money-to-pay-cost-sharing/

15 Charles Brennan. Deductible Affordability for Colorado’s Working-Age Families. Colorado Center on law &
Policy. August 12, 2019.

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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.