Colorado AG predicts billion-dollar price tag for Medicaid expansion

By Katie Kerwin McCrimmon

If Colorado decides to expand Medicaid coverage to a larger percentage of the poor, the the states share could be a billion dollars over the next decade, Attorney General John Suthers warned on Monday.

Suthers, who opposed the Affordable Care Act (ACA) in court, said during a post-mortem panel discussion on Monday that Colorados governor and lawmakers face a tough decision.

The expansion for a lot of states may seem like a no-brainer, Suthers said during a discussion of the Supreme Court ruling sponsored by the Denver Metro Chamber of Commerce at the Sheraton Denver Downtown.

Nationwide, the Medicaid expansion could help cover up to 25 million additional uninsured people, Suthers said.

But for states like Coloradothe legislature cant just raise taxes. The voters would have to approve that. Coming up with an extra billion dollars between 2016 and 2021 isnt going to be all that easy.

On the day the Supreme Court ruled, Gov. John Hickenlooper gave only a lukewarm nod to the Medicaid expansion.

Well, well see. Were certainly looking at that. Were probably a little bit premature, but were certainly looking at it and trying to figure out a way we can do that and still live within our means, Hickenlooper said at a press conference in his office last Thursday.

Gov. John Hickenlooper gave only a tepid nod to the Medicaid expansion following the Supreme Courts ruling on the Affordable Care Act.

His chief health policy director, Lorez Meinhold, was not able to say Monday whether Suthers billion dollar cost estimate is accurate. The best figures the state has are more than two years old and both costs and estimates of the uninsured have changed since then, Meinhold said.

She said state analysts will continue to evaluate whether to opt in to the Medicaid expansion.

No decision has been made yet. We will spend the coming weeks and months analyzing the ruling, Meinhold said. We will be doing some updated fiscal analysis for the November budget request.

We will continue to work with our stakeholders Colorado insurers, health care providers, business (leaders), residents, legislators. We remain dedicated to building a health system that works for Colorado one that addresses both coverage and costs of health care, Meinhold said.

An Urban Institute analysis done in May of 2010 for the Kaiser Commission on Medicaid and the Uninsuredestimated that between 2014 and 2019, Colorado would spend about $470 million to cover additional uninsured people. Since then, the economy worsened and Medicaid rolls across the country have spiked as more people have lost jobs and health insurance.

Under last weeks Supreme Court ruling that upheld the ACA, the justices gave states the freedom to opt out of a requirement that all states would need to cover an additional group of poor patients. Since the ruling on Thursday, several Republican governors have vowed not to cover additional poor people. The ACA had required states to cover people with incomes less than 133 percent of the poverty level (or about $30,000 for a family of four). But the justices said that the federal government could not take away Medicaid funding for states that refused to enact this expansion. That, in essence, gives states the choice whether to opt out of the expansion.

To encourage states to provide Medicaid coverage to additional poor people, the federal government would pick up 100 percent of the tab from 2014 to 2016. But starting in 2016, states would have to pay a gradually larger share of the costs, capped at 10 percent.

States are now scrambling to figure out how to respond to the Medicaid portion of the ACA ruling, which some are calling the sleeper issue that few expected to emerge from the Supreme Court.

Among the other speakers at Mondays chamber breakfast were Patty Fontneau, executive director and CEO for Colorados new online insurance marketplace, the Colorado Health Benefit Exchange, and Cindy Gillespie, senior managing director for McKenna Long & Aldridges public policy and regulatory affairs practice.

Cindy Gillespie, left, a former aide to Mitt Romney, and Patty Fotneau, executive director and CEO of Colorados Health Benefit Exchange, spoke Monday about the future of the Affordable Care Act at a forum sponsored by the Denver Metro Chamber of Commerce.

Gillespie said she has already fielded at least a dozen calls from state officials around the country wondering if they can opt in to the Medicaid expansion for the first two years when theres no cost to the states then opt out later once states are on the hook to pay 10 percent of the tab.

Its a legitimate question, said Gillespie, who was a key advisor to former Gov. Mitt Romney and helped develop Massachusetts health insurance reforms. She now works in Denver and Washington, D.C.

She said politicians, business leaders and health policy experts all know that the formula could change. Even if the federal government promises to pay for the expansion, budget troubles down the road could cause future lawmakers to renege.

For now, Gillespie is advising states that opt in to the Medicaid expansion to plan on long-term coverage.

Its a very complex situation, she said. On a very practical level, once they opt in, theyre probably going to have opt in (during future years). Once they put that population (from 100 to 133 percent of the federal poverty level) into (Medicaid) insurance, then theres not going to be any way to toss them back out again.

Fontneau told business and health leaders at the panel discussion that Colorados new exchange will be open for enrollment starting in October of 2013. Insurance plans will take effect starting on Jan. 1, 2014.

She said her team was watching the ACA ruling, but could not afford to be distracted by it.

We knew it was happening, but we just kept moving forward because we didnt have a choice. Were in a good position in Colorado and we will have a state benefit exchange, Fontneau said.

A bipartisan group of lawmakers created Colorados health exchange last year. It will provide a place where both individuals and small businesses can shop online and compare insurance plans.

Right now, its difficult to know whats better for me, she said.

The exchange should help consumers make better decisions about costs and benefits of various plans. She said the exchange will be testing online comparison tools by next May.