Gov. Bill Ritter announced a $1.2 billion plan Thursday to collect fees from hospitals, snag matching federal funds and provide health insurance for at least 100,000 more needy Coloradans.
The proposal, which mimics models in 23 other states, would leverage a fee on every hospital and toss that money — about $600 million — into a state pot.
Then Colorado could draw matching funds from the federal government and use the money to cover more people without insurance.
“These are tough economic times, we all know that,” Ritter said. “We know the number of uninsured only goes up when the economy goes down.”
About 800,000 people in Colorado, including 180,000 children, lack health insurance.
Backers of the plan, called the Colorado Healthcare Affordability Act, say it will ultimately drive down the cost of health care.
Data in Colorado and West Virginia have shown that when government reimbursement for Medicaid patients increases, hospital bills sent to insurance companies decrease, according to the Colorado Hospital Association.
The legislation would prohibit hospitals from passing on the fee to customers and would require an annual transparent accounting of fees paid by each hospital and new revenue from Medicaid reimbursements, said Sen. Moe Keller, D-Wheat Ridge.
She said the proposal, sponsored by the legislature’s bipartisan Joint Budget Committee, “will help contain” the problem of cost-shifting — the process of hospitals transferring the cost of caring for the uninsured to people with insurance. In turn, insurance companies raise their premiums.
Hospitals in the state spend $375 million each year on uncompensated care for needy people. That is because they are reimbursed for only about 55 percent of the cost for treating Medicaid patients, said hospital association president Steven Summer.
The proposed legislation, which requires approval from the state legislature and the federal government, would increase that rate of reimbursement, lawmakers said.
The formula for exactly how much hospitals will pay in fees and how much they will collect in return for caring for Medicaid patients is not settled, Summer said.
The hospital association has been meeting for months to come up with a plan supported by most hospitals, including those that don’t serve many patients without insurance.
The percentage of Medicaid patients ranges widely across Colorado hospitals. About 44 percent of patients at Denver Health have Medicaid, compared with just 3.2 percent at Sky Ridge Medical Center in Lone Tree, according to the Colorado Health Market Review.
Denver Health chief executive Dr. Patricia Gabow said “anything that decreases the number of uninsured helps the people” by lowering costs and covering more families without insurance.
Dr. Mark Laitos, a family physician in Longmont and president-elect of the Colorado Medical Society, said the plan to insure more Coloradans is necessary — especially during an economic crisis.
“People I’ve been caring for for 25 years all of sudden are saying, ‘Say, doc, I don’t have insurance,’ ” he said. “It’s a very good bill.”
At a news conference, Ritter was flanked by several lawmakers who touted the bill’s bipartisan support. But at the Capitol, not all Republicans were on board.
“When we’re in a deep recession, it’s not the time to grow government,” said Rep. Frank McNulty, R-Highlands Ranch. “That’s precisely what Gov. Ritter is doing with this proposal.”
McNulty laughed at the part of the legislation that would prohibit hospitals from including the fee on patients’ itemized bills. He said he had little doubt hospitals would find a way to pass on the fee to consumers.
Jennifer Brown: 303-954-1593 or jenbrown@denverpost.com
States with similar programs
States that have passed legislation similar to the proposed Colorado Healthcare Affordability Act:
Oregon
Montana
Kansas
Minnesota
Wisconsin
Illinois
Michigan
Missouri
Mississippi
Kentucky
Ohio
West Virginia
South Carolina
Florida
New York
Vermont
New Hampshire
Maine
Massachusetts
Rhode Island
Idaho
Pennsylvania
Maryland
Source: Colorado Hospital Association
