Colorado Legislators May Push HPF Through Constitutional Loophole

Published April 27, 2016

A bill that would exempt Colorado’s Hospital Provider Fee (HPF) program from the state constitution’s Taxpayer’s Bill of Rights (TABOR) has advanced to hearings on the House floor.

The House Committee on Appropriations voted 7–6 on March 29 to refer House Bill 1420, sponsored by House Speaker Dickey Lee Hullinghorst (D-Boulder County) and Sen. Larry Crowder (R-Alamosa County), to the Committee of the Whole.

HB 1420 would establish the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE) as a government-owned business to administer the state’s HPF. HPF is the vehicle by which Colorado expanded Medicaid under the Affordable Care Act (ACA) in 2014 and by which the state collected almost $700 million in revenue the following year.

CHASE’s designation as an “enterprise” would exempt the program from the state constitution’s TABOR, which mandates voters shall decide at the ballot whether Colorado must refund to taxpayers surplus revenue collected by the state, except when the surplus comes from a state “enterprise.”

If passed, CHASE will take effect on July 1, 2016, provided the federal Centers for Medicare and Medicaid Services (CMS) determine the program complies with federal law, according to the bill’s fiscal note.

Word Games

Linda Gorman, director of the Health Care Policy Center at the Independence Institute, says the bill manipulates the meaning of “enterprise” in order to circumvent the state’s constitution.

“If an enterprise that forces taxpayers to put more into a fund run for the benefit of the state Medicaid program and its clients is a ‘government business enterprise,’ then what program run by government is not a government business enterprise?” Gorman said.

Gorman says CHASE would perform no functions characteristic of business enterprises.

“It isn’t selling goods or performing services; it’s just deploying money to inflate Medicaid payments,” Gorman said.

‘Gangster Government Acting Greedily’

Jonathan Lockwood, executive director of Advancing Colorado, called CHASE a “hospital provider tax scam.”

“The hospital provider fee ‘enterprise’ won’t help change any outcomes for the better in health care,” Lockwood said.

Lockwood says CHASE proponents are taking advantage of a legal loophole to evade constitutional limits on Colorado’s authority to tax residents.

“The legal loophole being exploited by Sen. Crowder’s bill stands in direct contrast with Coloradans’ constitutional rights,” Lockwood said. “What we are seeing is gangster government acting greedily as usual, and elected officials, like Sen. Crowder and Speaker Hullinghorst, are literally scoffing at Coloradans for thinking government should be regulated by the Taxpayer’s Bill of Rights.”

Michael McGrady ([email protected]writes from Colorado Springs, Colorado.

Internet Info:

Matthew Glans, “Colorado’s Hospital Provider Tax and TABOR Collide,” Research & Commentary, The Heartland Institute, February 8, 2016:

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