DENVER (CBS4) – Colorado could follow California’s lead in providing subsidies to help fund health care for people who aren’t citizens. A bill by Democratic state lawmakers would replace a federal tax on health insurers with a state fee to help pay for subsidies and other programs aimed at helping low-income Coloradans. A new government-run enterprise would oversee the money.
The Colorado Association of Health Plans and Colorado Chamber of Commerce say they weren’t told about the bill that was introduced late Tuesday and heard in committee Wednesday morning.
“The majority of this tax will be born by employers who purchase health care for their employees and therefore their employees will also be part of this tax and they won’t see the benefits of this tax,” Amanda Massey told members of the Senate Finance Committee.
Massey is the executive director of the Colorado Association of Health Plans, and says the bill will result in premium increases for 30% of Coloradans to pay for a so-called Reinsurance program that benefits 2%-3%. The legislature set up the program to help people who live in mountain communities, where premiums are among the highest in the country, afford health care. It costs the state $60 million a year. The bill would generate $135 million.
“Every dollar of that additional money is going to be utilized to make health care more affordable, to expand the populations that we can serve to make sure that those folks can afford health insurance, too,” said bill sponsor Sen. Dominic Moreno.
Moreno says the money generated by the bill would also expand state subsidies to non-citizens for the first time. An estimated $35 million could go to subsidized care.
State Sen. Jim Smallwood says the subsidies come with a trade-off. The average family of four in Colorado could see their premiums go up by $600 a year.
“It’s a lot of money that in this time I think belongs back in the pockets of our hardworking citizens,” Smallwood said.
“All you need to do is read the bill to know this is a slush fund bill.”
Smallwood says the bill is a step toward a public insurance option.
Gov. Jared Polis, who has made lowering the cost of health care a focus of his administration, supports the bill despite insurer’s claims that it will do just the opposite.
The bill is almost certain to result in a lawsuit by those who consider the fee a tax, which needs voter approval in Colorado.