Colorado prepares for Obamacare repeal under Trump administration

WASHINGTON — Plans by Republicans to dismantle the Affordable Care Act in the first month of Donald Trump’s presidency have sent tremors across Colorado, with activists and accountants both preparing for a seismic shift in policy.

Analysts expect that a repeal would have an outsized impact on Colorado, as the state embraced the full spectrum of President Barack Obama’s signature piece of legislation, better known as Obamacare.

Under the 2010 law, policymakers expanded the number of Coloradans who receive health insurance through Medicaid, created a program for residents to buy coverage through a state exchange and reduced the cost of emergency-room visits by patients without insurance.

But the program also was a precursor to new problems, notably the collapse of a nonprofit insurer called Colorado HealthOP — which forced more than 80,000 residents to look for new insurance and wasted an estimated $72 million in federal loans.


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  • Critics have blamed the Affordable Care Act for increasing insurance rates for thousands of Coloradans, especially those living in rural parts of the state. And some businesses have complained about the paperwork required by the law — which one consultant said they had just grown accustomed to.

    “Employers are fatigued. They have endured a lot these last six years,” said John Kirke, a top executive at IMA Inc., a Denver-based company that helps business find the right benefits for its employees.

    He described the political fight and eventual rollout of Obama’s health law as a “three-act play” and that the prospects of another health care battle are giving employers a new round of butterflies.

    “Based on my recent conversations with clients, they are in this ‘Here we go again’ state. That’s the best emotion I can articulate,” he said.

    The effort to repeal the act began Tuesday — the first day of a new session of Congress — with the introduction of a plan to undo some, but not all, of the law.

    Although Republicans will control the White House and both chambers of Congress starting Jan. 20, they don’t have a big enough majority to overcome a filibuster in the Senate. That means they can’t fully repeal the Affordable Care Act over Democratic objections.

    However, using a process known as budget reconciliation, the GOP needs only a simple majority in the Senate to target the pieces of the law that deal with the federal budget.

    So while Republicans can’t easily erase certain policy-oriented changes — such as how the law prohibits insurers from denying coverage because of pre-existing conditions — they can unravel sections that impact taxes or Medicaid, for example.

    In addition, House Speaker Paul Ryan said Thursday that GOP leaders wanted to take away federal funding for Planned Parenthood as part of the party’s efforts to repeal the Affordable Care Act.

    A trickier question is how Republicans plan to replace Obamacare. With no clear agreement, much of the early conversation in Colorado has centered on how a repeal of its budgetary provisions would impact the state — starting with the estimated 407,000 Coloradans who get health insurance through Medicaid because of the law.

    Medicaid expands

    One of the act’s most visible effects is how it expanded the requirements for Medicaid, a government health insurance program that is designed to cover low-income or disabled residents.

    Roughly 1.3 million Coloradans are on the Medicaid rolls and about a third of those — 407,000 or so residents — are included because of the broader safety net established by the act.

    Advocates of the legislation said this expansion is a key reason why there has been a sharp drop in the number of Colorado residents without health insurance: from nearly 15.8 percent in 2011 to 6.7 percent in 2015, according to the Colorado Health Institute.

    If Congress rolls back the Medicaid expansion, without providing an alternative, the number of uninsured Coloradans could rise again, said Michele Lueck, CEO of the Colorado Health Institute.

    “I can’t help but think there were will be some reversal of the trendline we have seen,” she said.

    That prospect is equally worrisome to Colorado hospitals, which could shoulder more of the cost of treating uninsured patients in a post-repeal world.

    Hospital emergency rooms must treat patients regardless of insurance coverage, and the cost of this “uncompensated care” long has been a financial drain on hospitals — and the health care system as a whole. But due largely to the expansion of Medicaid, these figures, which include ER and hospital care, have dropped in half in Colorado between 2009 and 2015.

    According to state figures, the cost of uncompensated care in 2009 for Colorado was nearly $2.3 billion; in 2015, that cost fell to about $1.1 billion.

    Not everyone, however, sees the expansion of Medicaid as positive — as there are concerns the program could grow too large.

    “Medicaid is not designed to cover large chunks of the population,” said Linda Gorman of the Independence Institute. She warned more Medicaid coverage could lead to hospital overuse.

    U.S. Rep. Scott Tipton, R-Cortez, said hospital officials in rural Colorado have told him the Medicaid expansion has transformed emergency rooms into a primary-care facilities — while putting a strain on resources. “Through Medicaid, we are driving some of those costs higher.”

    But Dr. Robin Dickinson, an Englewood physician who caters to patients without insurance or those who rely on Medicaid, said the program’s expansion had a huge impact on her patient population — often by giving her patients the flexibility to move between jobs.

    “Having that Medicaid safety net has been phenomenal for them,” said Dickinson, who added she also relied on the act when she opened her private practice amid health problems for her family.

    “I agree there are problems with the Affordable Care Act — and I’d love to see something better — but to tear that away without having a replacement is inhumane,” she said.

    Dark clouds ahead

    Another program Republicans plan to target is the network of state insurance exchanges created by the act.

    In Colorado, more residents get their insurance through their employer than anything else; about half the state is covered this way. But for those not covered by their employer or Medicaid, there’s an option to get an individual health plan — a route taken by roughly 450,000 Coloradans.

    Of those, about 157,000 are seeking insurance in 2017 through Connect for Health Colorado, the individual exchange the Affordable Care Act helped create.

    Customers on the exchange often qualify for assistance to help pay for coverage — in 2016, nearly 112,000 of them received subsidies that averaged $264 a month, according to Connect for Health Colorado.

    These subsidies, however, are a likely target of Republican repeal efforts, which could cripple Connect for Health Colorado. More than half of its customers relied on subsidies last year.

    Republicans also are pushing to eliminate the penalty for U.S. residents who don’t buy health insurance, which was mandated by the Affordable Care Act. Without that stick, there is a concern additional customers could bail from the exchange.

    Another financial worry: Auditors last month told Connect for Health Colorado that it owes about $9.7 million for misspending or improperly documenting some of the grant money that was used to launch it.

    In spite of the troubles, Kevin Patterson, CEO of the exchange, said he has hope that Connect for Health Colorado could survive a repeal of the health care law — possibly by attracting small businesses and not just individual consumers.

    “We are not a state agency,” he said. “We can be a lot more nimble for the changes that can occur.”

    Cost is an issue

    One criticism of the Affordable Care Act is how it has affected insurance premiums, especially for residents with fewer options in more rural areas.

    The 450,000 Coloradans who buy their own health insurance are expected to see their rates increase 20.4 percent this year over last year — although many of these consumers qualify for subsidies that would more than defray that cost, according to the Colorado Division of Insurance.

    Choice is another worry. In 14 western Colorado counties this year, residents who buy their insurance through the exchange only will have the option of one carrier. That has fueled efforts to dismantle the health care law.

    “Dwindling choices and canceled plans have led to skyrocketing premiums that Americans simply cannot afford,” said U.S. Sen. Cory Gardner, R-Colo.

    Colorado’s individual market, however, tells only a fraction of the story of what’s happened to the health insurance costs over the past several years.

    Between 2015 and 2016, the average premium for a U.S. family on an employer insurance plan — the most-used option by non-elderly consumers — rose 3 percent to about $18,142, according to a survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

    Analysts described the increase as modest compared with past trends. Since 2011, family premiums have risen 20 percent, which is less than the 31 percent increase between 2006 and 2011 and much less than the 63 percent increase between 2001 and 2006.

    How much of this is due to the Affordable Care Act is open to debate, although the growing cost of deductibles is one factor.

    “We’re seeing premiums rising at historically slow rates, which helps workers and employers alike, but it’s made possible in part by the more rapid rise in the deductibles workers must pay,” Drew Altman, CEO of the Kaiser Family Foundation, said in a statement.

    Although much of the fight is expected to revolve around the state exchanges and the expansion of Medicaid, other facets of the program probably will trigger their own flare-ups — especially as Republicans search for a replacement.

    One major question is how GOP lawmakers plan to deal with a potential hit to the federal purse. In June 2015, the Congressional Budget Office estimated a repeal of the Affordable Care Act would increase federal deficits by at least $137 billion between 2016 and 2025.

    Staff reporter John Ingold contributed to this story.

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