Colorado Commission Proposes More Government Intervention

Published March 1, 2008

The Colorado Legislature’s Blue Ribbon Commission on Health Care Reform has approved a package of recommendations for comprehensive reform of the state’s health care system.

Health policy analysts criticized the commission’s recommendations, saying they would damage the market and decrease consumer choice.

Calling for Government Action

The Blue Ribbon Commission recommended government action in five key areas: insurance premiums, health coverage, consumer choice, quality of care, and coordination of care.

The commission recommended the state act to slow the growth of insurance premiums by passing legislation that would “cover the uninsured, reduce administrative costs, and increase Medicaid provider reimbursements.”

The report encouraged the state government to expand health coverage “by enhancing access to both public and private coverage,” in part by mandating all Coloradans maintain a minimum level of health insurance.

Other recommendations to increase coverage included creating a “connector,” a government department to assist individuals and small employers in choosing from various insurance options; encouraging more residents to invest in Health Savings Accounts, which Colorado was one of the first states in the country to allow; merging and restructuring the state’s Medicaid and Child Health Plan Plus (CHP+) to make them work “more efficiently”; and expanding the restructured CHP+ so more adults and children can be covered.

Recommending Transparency

The commission suggested increasing consumer choice by mandating all cost and quality information be made available to the public, much like the state of Michigan recently did with its online transparency program. (See “Michigan Offers Health Care Price-Shopping Online,” page 10.)

The commission also suggested government can and should increase quality and coordination of care by financially and legislatively supporting programs such as evidence-based medicine, health information technology, and “medical homes” for Coloradans.

‘Bad for the Market’

Devon M. Herrick, Ph.D., a senior fellow at the Dallas-based National Center for Policy Analysis, called the proposal “bad for taxpayers, bad for the market, and bad for those forced to buy coverage they may not want.”

Herrick was especially critical of the insurance mandate recommendation, saying, “Mandates are difficult to enforce. All but three states mandate auto liability coverage. Yet, in all states the rate of uninsured motorists is about the same as those that lack health insurance.

“The commission states that residents will be able to choose from a broad range of products–including a minimum benefit plan costing an average of about $200 per month,” Herrick continued. “This sounds excessive. The Web site currently features high-deductible health plans with premiums as low as $44 for a 35-year-old male.

“Obviously, the commission is not just proposing to force Colorado residents to have coverage; it would force them to have coverage more lavish than residents may want,” Herrick continued.

‘Big Prices, Big Regulations’

Without cost reduction, better health care accessibility is not possible, according to Diana M. Ernst, a health care policy fellow at the Pacific Research Institute in San Francisco. “Colorado’s Blue Ribbon Commission, despite its winning name, has proposed a dicey health care reform package with big prices and big regulations for Coloradans,” she said.

Ernst pointed out the commission’s recommendations would mandate all Coloradans buy health insurance with average monthly premiums of $200 per individual, “a mandate enforced through income tax penalties,” and that “the commission would also expand eligibility for public programs that are notorious for underpaying.”

Ernst says the Blue Ribbon Commission for Health Care Reform does have “a few good suggestions,” such as “increasing Medicaid provider reimbursements,” which she says are “damagingly low” at present.

The Blue Ribbon Commission acknowledged the need to avoid a one-size-fits-all government solution to health care, saying in a news release, “People have differing income levels and health care needs, and health status can change in an instant. We need a range of interventions that respond to such differing needs.

“Some people simply cannot afford private insurance coverage. Those people ought to have access to public coverage for basic health care needs,” the statement added.

More Competition, Lower Prices

Ernst says further government involvement in the health care market would not increase consumer choice. “Coloradans will have more control of their health care when they rely less on employers for health insurance but also when individual plans can better compete to provide a broad spectrum of the highest quality services, with the lowest prices,” she said.

“The proper approach would be to target the programs to more specific populations, and focus government funding not on the middle class but on the truly needy,” said J.P. Wieske, director of state affairs for the Council for Affordable Health Insurance.

The report is expected to be presented formally to the Colorado Legislature early this year.

Dr. Sanjit Bagchi ([email protected]) writes from India.