May 31, 2011 11:28 PM UTC

Hickenlooper Surprisingly Vetoes Children's Health Care Premium Hike

• 27 Comments
• by: Colorado Pols

UPDATE: FOX 31’s Eli Stokols catches up with an irate Speaker Frank McNulty:

“I am extremely disappointed that Gov. Hickenlooper broke from the budget framework that we agreed to by vetoing S.B. 213,” said House Speaker Frank McNulty, R-Highlands Ranch.

“Republicans and Democrats in both the House and Senate took an important step on welfare reform and the governor took a step back. That said, welfare reform is now in his court. We must ease the burden on working families and small businesses who are paying for these government programs.”

[Hickenlooper spokesman Eric] Brown took issue with part of McNulty’s statement.

“S.B. 213 was not part of any budget deal we agreed to,” Brown said.

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A statement received a short while ago, Gov. John Hickenlooper has vetoed a bill passed by the General Assembly concerning premiums for children’s health insurance, Senate Bill 213–this is a significant veto, as SB-213 was a component of the budget compromise negotiated between Democrats and Republicans this year.

According to the statement, the cost in human terms was too high:

The fees required by SB11-213 represent a 1000% increase in the cost of the current CHP+ program to enrollees in the 205% of federal poverty level (FPL) to 250% FPL income bracket.  The Department of Health Care Policy and Financing (the Department) modeled potential impacts of the bill and estimates that approximately 20% of the children currently enrolled in the CHP+ program, or 2,500 kids, would drop off the program because of the dramatic increase in cost.

Research from across the country and in Colorado indicates that if children drop off the CHP+ program, they would likely become uninsured.  Increasing the number of uninsured children in the state will result in a rise in uncompensated costs in the health care system thereby increasing cost shifting to those with insurance.  At a time when employers large and small are struggling to continue to provide health insurance to workers, it doesn’t make sense to heap additional costs on the health care system in the form of uncompensated care.

Full statement after the jump–we’ve already heard that Speaker Frank McNulty is very upset about this veto, as it leaves Republicans who argued in favor of the bill, some like Sen. Greg Brophy embarrassingly prattling on about how poor people spend their money on cigarettes and lottery tickets, without cover. Health care advocates say that the bill would not have resulted in budget savings anyway, due to higher costs of administering the premiums–meaning that the savings to justify throwing kids off the coverage rolls wasn’t really to be had.

And they are celebrating this veto as evidence that Hickenlooper does indeed listen to reason.

Gov. Hickenlooper vetoes SB 213

DENVER – Tuesday, May 31, 2011 – Gov. John Hickenlooper today vetoed SB 213 because the bill poses adverse consequences on children’s access to health insurance through the CHP+ program.

“Expecting low-income families in Colorado to contribute when it comes to providing for, and placing a priority upon, their health care, makes sense,” Hickenlooper wrote in a letter to the General Assembly. “What is troubling about this legislation, however, is not the policy intent, but the practical, and negative impact, it will have on children in low-income families.”

Hickenlooper pledged to work with the Joint Budget Committee and the General Assembly to develop a better approach to changes in the Child Health Plan Plus program.

He said the Department of Health Care Policy and Financing will increase the annual enrollment fee through their regular, rule-making process and conduct a comprehensive analysis of cost-sharing in the program. The Department will evaluate changes in the program this summer and fall and deliver recommendations to the Joint Budget Committee on or before Nov. 1, 2011.

“The focus will be to implement a change that is minimally disruptive, administratively efficient, effective and elegant, and supports the goal of ensuring that kids have access to coverage,” Hickenlooper wrote in the letter.

Numerous community groups, health organizations and individuals have urged Hickenlooper in recent weeks to veto SB 213. Those groups and organizations include: The Children’s Hospital; Colorado Children’s Campaign; Colorado Medical Society; Denver Health Medical Center; Health District of Northern Larimer County; Kaiser; Mental Health America of Colorado; Pathways Past Poverty; Rocky Mountain Health Plan; Women’s Lobby of Colorado; United Way of Larimer County; All Kids Covered; Colorado Academy of Family Physicians; Colorado Community Health Network; and Junior League of Denver.

Here is the letter Hickenlooper delivered to the General Assembly today:

The Honorable Colorado Senate

Sixty-Eighth General Assembly

State Capitol Building

Denver, Colorado 80203

Ladies and Gentlemen:

This is to inform you that I am vetoing Senate Bill 11-213 Concerning Enrollee Cost-Sharing for Children Enrolled in the Children’s Basic Health Plan, and Making an Appropriation Therefor.

We respect the General Assembly’s intention to reduce the budget impact of increasing Child Health Plan Plus (CHP+) costs and the goal of encouraging personal responsibility by CHP+ recipients for a reasonable share of these costs.  Expecting low-income families in Colorado to contribute when it comes to providing for, and placing a priority upon, their health care, makes sense.  What is troubling about this legislation, however, is not the policy intent, but the practical, and negative impact, it will have on children in low-income families.

While the legislation was not intended to put children at risk, we have determined that the bill poses adverse consequences on children’s access to health insurance through the CHP+ program.  Further evaluation of the program is necessary and underway in our administration.   The Department of Health Care Policy and Financing will be conducting an analysis of cost-sharing and evaluating possible changes this summer and fall. As a result of that work, there will be changes in the annual enrollment fee and potentially other cost-sharing measures. The focus will be to implement a change that is minimally disruptive, administratively efficient, effective and elegant, and supports the goal of ensuring that kids have access to coverage.  Because the expected timeline of SB11-213 would have been sometime in 2012, the process we will follow will implement a cost-sharing structure on a similar or earlier timeline. The Department will share these proposals to the JBC for approval on or before November 1 as required in C.R.S. 25.5-8-107(b).

The fees required by SB11-213 represent a 1000% increase in the cost of the current CHP+ program to enrollees in the 205% of federal poverty level (FPL) to 250% FPL income bracket.  The Department of Health Care Policy and Financing (the Department) modeled potential impacts of the bill and estimates that approximately 20% of the children currently enrolled in the CHP+ program, or 2,500 kids, would drop off the program because of the dramatic increase in cost.

Research from across the country and in Colorado indicates that if children drop off the CHP+ program, they would likely become uninsured.  Increasing the number of uninsured children in the state will result in a rise in uncompensated costs in the health care system thereby increasing cost shifting to those with insurance.  At a time when employers large and small are struggling to continue to provide health insurance to workers, it doesn’t make sense to heap additional costs on the health care system in the form of uncompensated care.

We appreciate the work of the General Assembly and understand that the intention of legislators was to make sure that we are appropriately utilizing scarce state resources in these challenging economic times.  We share these goals and will work with the General Assembly to develop policies that bend the cost curve, improve efficiencies and protect children. Put bluntly, we believe the cost savings to taxpayers contemplated in SB11-213 are out-weighed by the unintended costs of children going without access to affordable care and ending up instead, in emergency clinics.

Instead of allowing SB 11-213 to become law, we would rather work with the Joint Budget Committee and the General Assembly to develop a better approach.

Sincerely,

John Hickenlooper

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