Nov 15, 2018

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State budget requests provide a hopeful glimpse to Colorado’s future

by | Nov 15, 2018

Colorado Center on Law and Policy (CCLP) is encouraged by many of the requests outlined in Gov. John Hickenlooper’s proposed budget for fiscal year 2019-20 – particularly the recommendations that pertain to the economic security, health and career opportunities for low-income Coloradans.

This year’s $33.4 billion budget request reflects a 4.8 percent increase in total funds – of which 41 percent is earmarked for “strategic investments” intended to improve health care, make child care and college more affordable and build a strong workforce for the economy of the future.

We believe many of these requests warrant careful consideration when the General Assembly convenes in January.

Here are the budget highlights for our Family Economic Security and Health Care programs and some thoughts from CCLP’s Chaer Robert and Elisabeth Arenales.

Family Economic Security
Requests from Colorado’s Department of Human Services include:

* An annual 1.5 percent Cost of Living Adjustment (COLA) for Colorado Works’ Basic Cash Assistance (BCA). BCA recipients are among the lowest-income residents of the state and usually have no other source of income. Earlier this year, CCLP and its partners successfully urged Colorado’s Human Services Board to increase BCA for the first time in 10 years by 10 percent. Unfortunately, since the time Colorado Works (the state’s Temporary Assistance to Needy Families [TANF] program) was established in 1997, the purchasing power of Colorado’s BCA has decreased by 35 percent because the grant amount has not kept pace with inflation. On average, a single-parent family with two children receives a maximum BCA payment of $508 a month (providing income that puts them at just 29 percent of the federal poverty level). CCLP’s Chaer Robert pointed out that this low funding level causes “an economic fragility that hurts kids and families’ quest to get back on their feet,” so an ongoing raise would help.

* An increase in $1 million total funds to solidify outreach, access and delivery of Supplemental Nutrition Assistance Program (SNAP) for a three-year project by increasing the state’s general fund dollars by $465,000 for matching federal dollars. The program would support programmatic activities to increase SNAP enrollment in rural and underserved communities. Robert said continuing the work of this expiring grant is a smart investment that benefits the state, local economies and hungry kids.

* The Department of Human Services also requested $966,977 in federal TANF funds in fiscal year 2019-20 and $1.8 million in fiscal year 2020-21 to provide employment services to low-income, non-custodial parents struggling to pay child support. The funds for county offices will serve up to 5,200 parents at an average cost of $300 per participant. Robert said the pilot programs make sense because they switch the emphasis from child-support “enforcement” to child-support “services,” which will help parents find and keep employment.

Regarding the governor’s tax credit proposals, Robert acknowledged that providing a match to the federal American Opportunity Tax Credit and the Lifelong Learning Credit can be helpful to some Colorado families. She notes that because the credits deal with current higher education expenses, they don’t address the student-debt problem – except to diminish some potential debt for students moving forward.

The budget also proposes increasing a state tax credit to individuals making $60,000 or less for child care expenses from a 50 percent match to the federal credit to 100 percent – while expanding the income cap to families making more than $60,000 but less than $150,000. Robert was disappointed that that increase would not include those covered by the Low-Income Child Care Tax Credit. Families earning less than $24,000 a year or single parents earning under $18,000 only benefit from this credit because their income is too low to owe federal taxes, and thus do not qualify for the regular Child Care Tax Credit. Robert added that CCLP is working on legislation to make the Low-Income Child Care Tax Credit permanent, rather than sunset every three years.

Finally, Robert said that a proposal to increase the state Earned Income Tax Credit (EITC) and pay the increased amount from funds that TABOR would otherwise require to be refunded would be good if the EITC remains permanent at 10 percent of the federal credit with an additional match in years of TABOR surplus. But she cautioned that structuring the EITC as only a TABOR refund mechanism would be a step back for Coloradans. The original state EITC was a TABOR surplus refund mechanism. Consequently, low-income working families did not receive an EITC between 2002-2014 because there was no TABOR surplus.

Health care
Requests from the Colorado Department of Health Care Policy and Financing (HCPF) include:

* Funding to design and adopt a new tool to measure the need for long-term home health care for adults and private-duty nursing services for Medicaid-enrolled children and adults. While CCLP supports the idea of using clinically validated tools to measure clients’ service needs, CCLP’s Elisabeth Arenales said she’s concerned by what appears to be HCPF’s presumption that the tool will generate substantial cost savings. “No tool used to determine medical necessity should be designed with cost savings as the goal,” Arenales said. “Cost savings may or may not result, but the tool should be used to determine how best to meet a client’s medical needs.”

* Using general fund dollars to support the All Payer Claims Data Base (APCD) – a tool intended to control and analyze health care costs through data collection. CCLP supports the budget request on the premise that the APCD was established to inform policy decisions based on independent, reliable data and data analysis. Unfortunately, without a reliable funding source, the Center for Improving Value in Health Care (or CIVHC, contracted by HCPF to develop the APCD) is limited in what it can do to benefit the state.  CCLP notes that the budget request seeks additional HCPF oversight over the APCD. We do not support that request, believing that current levels of statutory oversight are sufficient.

* Consolidating processes for mail sent to Medicaid clients and returned as undeliverable. HCPF reports that more than 3 million pieces of mail are returned each year to Colorado counties and medical assistance sites – endangering clients’ access to services and imposing an administrative burden on counties. According to HCPF, the proposal to let the state handle returned mail for Medicaid recipients from counties to the state will free up county resources devoted to handling these cases and allow for increased consolidation and oversight by the state. While CCLP supports these requests in principle, we are concerned that the volume of returned mail is due (at least in part) to delays in updating address information in the Colorado Benefits Management System (CBMS), a statewide computer network whose initial failure put hundreds of thousands of Coloradans in jeopardy without access to health care, medications, cash assistance and food. CCLP does not support this change until and unless sufficient protections are in place to ensure that clients are served. For example, there must be meaningful protocols for searching for client addresses and the state must be certain that counties are timely in entering new address information into CBMS.

* Providing additional funding for an IT project intended to expedite payments to health care providers for serving Medicaid clients. While CCLP supports the request, we remain concerned about HCPF IT management decisions that resulted in significant problems with the roll out of the COMMIT payment system project last year – resulting in considerable distress among Medicaid providers who went without payments for long periods of time. This put significant pressure on the Medicaid provider network and ultimately resulted in some small providers going out of business or dropping Medicaid clients. It appears this budget request is designed to continue to provide supports required because of a problematic IT roll out.

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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.