If you’re a legislator and want to win points with constituents and earn respect from Colorado’s chief executive, then carry legislation to bring down the high cost of health care. That’s what state Reps. Julie McCluskie, D-Dillon, and Dylan Roberts, D-Avon, did in their crusade to rein in medical costs by sponsoring HB 19-1168.
The measure, if passed, will create a statewide reinsurance program designed to lower insurance premiums by as much as 35 percent in some geographic areas next year. At face value that sounds meritorious; if only its sponsors had done their homework before rushing to introduce this poorly conceived measure.
The problem with this year’s reinsurance bill, entitled "State Innovation Waiver Reinsurance Program," is that it does nothing to drive down cost but everything to limit quality and choice. Reinsurance is not a bad idea and has some success in lowering costs in other states. Unfortunately, it its current form, the unintended consequences of this bill far outweigh any perceived benefit. Of all seven states with a reinsurance program, only one seeks to fund it on medical providers’ backs.
Reinsurance programs are usually funded by federal dollars. HB 19-1168 goes a step further by slashing payments to providers. The snowball effect of the measure continues by empowering the insurance commissioner — a political appointee — with unilateral authority to set rates for all healthcare providers for services to a portion of Coloradans.
Reinsurance programs that seek to lower healthcare costs seem like a good idea but funding the program by cutting providers’ operating capital and livelihoods is a bad idea. The commissioner’s rate setting will be based on a formula to cut insurance pay-outs, without giving merit to the actual costs associated with providing medical services.
Gouging hospitals and medical care professionals to cover the cost of reinsurance by cutting their compensation will force some practitioners to stop offering critical care services, services insurance companies are already reticent to cover.
The bill’s authors failed to do due diligence consideration of the long-range impacts of the measure. State legislators must recognize that forcing healthcare providers to cover the cost of reinsurance means high cost services like NICUs, emergency trauma and cancer treatments, could be on the chopping block. That would rob patients of medical treatments and choice.
Drafting HB19-1168 was rushed; if actuarial forecasting is not accurate, resulting in insufficient payments to fund claims, the commissioner of insurance will be forced to lower provider payments. Which in turn will mean, less services provided to consumers because medical professionals will not be able to do so cost-effectively.
The big winner if this measure passes are the insurance companies because they are not required to pass along savings to consumers.
If having healthcare is important to you and your loved ones, contact your state legislator and tell them to stand against passage of this year’s reinsurance bill HB19-1168.
Libby Szabo is a Jefferson County commissioner and a former state representative from House District 27.