By Adela Flores-Brennan and Gretchen Hammer
The legislature recently sent a bill to the governor that represents a step in the wrong direction for Colorados children. SB 213 creates monthly premiums in the Child Health Plan Plus (CHP+) program for kids who have family incomes between 206 percent and 250 percent of poverty. These are families of four who earn about $46,000 to $56,000 a year.
As a matter of public policy and as a matter of fiscal policy, SB 213 makes little sense and is indeed harmful. The bill will add to the number of uninsured children in Colorado, has only negligible or no positive impact on the state budget, and creates additional administrative burdens and red tape for families and the state agency that oversees CHP+.
Colorado has worked hard over the past few years to improve and streamline programs that provide health insurance coverage to children. As a result, 36,000 more Colorado kids became insured between 2008 and 2009 while poverty and unemployment increased. That is an accomplishment for which we should be proud.
Yet, the legislatures own Joint Budget Committee staff estimate that 20 percent of children affected by the bill, about 2,400 kids, will lose or forgo coverage as a result of the increased costs they will face if this bill becomes law. This research is consistent with Colorado-based and national data about what people can afford to pay for health care.
CHP+ is a low-cost source of health coverage for children by design. It provides a stable source of coverage so that regardless of their parents present financial situation, children do not forgo health care that is so vital to their growth and development. CHP+ was designed to operate like a private health insurance plan, and families already pay annual enrollment fees and co-payments.
Fiscal analysts at the legislature and experts at the Department of Health Care Policy and Financing both predict there will be substantial costs associated with the bill for administrative functions such as invoicing, printing and accounting, and programming the state computer system to accommodate the change. Further, the department predicts that the computer changes will take so long to get started and to complete that no savings will even be realized in the coming fiscal year. In fact, there would be a net loss to the state budget.
National research confirms that creating or increasing monthly premiums costs states money because clients postpone care until it becomes more costly to treat, and states face administrative burdens associated with monthly billing, and with disenrollment when families cannot afford coverage and then re-enrolling them at a later time.
Under the best-case scenario in the legislative staff analysis, there would be a net gain to the states general fund of $1.5 million in fiscal year 2012-2013. But, when compared to the cost of 2,400 children losing or forgoing coverage, the costs of lost coverage and of reversing gains already made clearly outweigh the benefits of this policy change.
The concept of monthly premiums in the CHP+ program has been tried in Colorado before and failed. It was deemed too costly, too administratively burdensome and too at odds with the goal of maximizing health coverage for Colorados children. For these reasons, the Owens Administration did away with monthly premiums a decade ago in favor of the current system of annual enrollment fees and copayments. That system works and should be kept intact.
Signing SB 213 into law is a step in the wrong direction for children and families and the effective performance of our public coverage programs.
Adela Flores-Brennan is an attorney who specializes on health policy issues for the Colorado Center on Law and Policy. Gretchen Hammer is a lead partner for All Kids Covered, a coalition of advocates pushing for health coverage for an estimated 175,000 uninsured Colorado children. Hammer is also executive director of the Colorado Coalition for the Medically Underserved.