Bill Summary for Bill Number SB08-217

Date: 04/09/2008

Final
BILL SUMMARY for SB08-217

SENATE COMMITTEE ON HEALTH AND HUMAN SERVICES

Votes: View-->	Action Taken:
Adopt prepared amendment L.002 (Attachment G). Th Adopt prepared amendment L.003 (Attachment H). Th Adopt prepared amendment L.004 (Attachment I). Th Moved a conceptual amendment to allow health insur Refer Senate Bill 08-217, as amended, to the Commi	Pass Without Objection Pass Without Objection Pass Without Objection TIE PASS

10:06 AM -- Senate Bill 08-217

Senator Hagedorn introduced Senate Bill 08-217, which creates the framework for the implementation of the Centennial Care Choices Program to reform the health care system in Colorado. He distributed two handouts to the committee (Attachments A and B). He discussed health care in the Netherlands and stated that cost shifting is driving up the cost of health insurance in the United States. Senator Hagedorn stated that most people don't want a big government health care program, but want a program with more choices. He discussed health care reform efforts in other states. He stated that neither the public or private sectors can, on their own, address access to care problems, and that the solution lies in creating a public/private partnership. He stated that SB 08-217 creates a framework for the implementation of a health care reform proposal with both public and private entities.

Senator Hagedorn discussed the specific provisions of the bill and referred to a summary document distributed to the committee (A copy of this document was not made available to staff). He explained that the bill requires the Department of Health Care Policy and Financing, in coordination with the Division of Insurance and a panel of experts, to acquire actuarial projections, research potential cost savings, and develop a request for proposals from health insurance companies for a new health insurance product known as a value benefit plan (VBP). He distributed a handout regarding the plan models available through the state employees' health benefit plan (Attachment C). Proposals on VBPs are to be received by August 1, 2009. After receipt of the proposals, the Department of Health Care Policy and Financing is required to evaluate the proposals and to make recommendations to the Governor regarding the proposals and any legislation needed to implement the proposals. The Governor then must submit recommendations for legislation to the General Assembly by the 30th legislative day of the 2010 legislative session. If the Governor determines that none of the proposals meets the bill's criteria, or that the proposals are otherwise inadequate, the Governor may reject the proposals. Legislation on the proposals may be introduced during the 2010 regular legislative session. The legislation must include an individual mandate; a mechanism to enforce the requirement that all Colorado residents obtain health insurance through state tax laws; standards that VBPs must satisfy in order to be certified by the Department of Health Care Policy and Financing and the Division of Insurance; a sliding scale premium subsidy program to assist low-income individuals and families in paying premium costs; the encouragement of evidence-based medicine through the creation of a patient safety council; authority for the department and the Division of Insurance to establish health marts; creation of a consumer advisory council for the Centennial Care Choices Program; and creation of a dedicated source of revenue, if necessary, to fund the premium subsidy program or other new state costs. Senator Hagedorn responded to questions from Senator Mitchell regarding the development and cost of a VBP.

10:57 AM -- Tom Swanson and A.W. Schnellbacher, AARP, testified that AARP does not support the bill. Mr. Swanson stated that 51.7 percent of all Coloradans get their health insurance from their employers and that employers may cease to offer health insurance benefits as the VBPs become available. Mr. Swanson described the elements that AARP believes must be present in quality health benefits and distributed a handout to the committee (Attachment D). Mr. Swanson stated the bill doesn't address health care costs.

11:04 AM -- Barry Keene, Health Care for All Colorado, testified that the American health care financing model is unique in the world and a key reason why health care costs in the United States are higher than in other countries. He stated that some of these high costs are related to health insurer administrative costs. He stated the bill is positioned to add to the number of insurers, and may exacerbate the problem with insurer administrative costs. He discussed health care reform efforts in Massachusetts and stated that health care reform efforts in Colorado should incorporate a cost redistribution model. Two specific aspects of the bill were objectionable to Mr. Keene: the individual mandate to purchase health insurance and the tax penalty imposed if health insurance is not purchased. He responded to questions from Senator Mitchell regarding his objections to the bill.

11:10 AM -- Scott Wasserman, Service Employees International Union, testified in conceptual support of the bill. He stated that there is no harm in allowing the state to issue a request for proposals for VBPs, and stated that the bill represents a roadmap for health care reform. He stated that private insurance carriers should compete for business based on value and quality of coverage. He stated that consumers should not be forced to purchase plans that do not meet their needs. He offered a suggestion that government programs, such as Medicaid, be allowed to respond to the request for proposals. He responded to questions from Senator Mitchell.

11:16 AM -- Fran Ricker, Colorado Nurses Association, testified that the association cannot support the bill because it relies on a private insurance model. She stated the bill doesn't address correct problems with private insurance, including high administrative costs, payment policies and procedures, and limitations and denials in coverage. She stated that the health care delivery system should be based on consumer needs. She recommended that the specifics of the request for proposals process be identified and stated that it is unclear if the VBPs will be an affordable product.

11:19 AM -- Polly Anderson, Colorado Community Health Network, testified in support of the bill in concept. She stated that in order for the coverage to be meaningful, VBPs must provide coverage for primary and preventative care. She stated that benefits for current Medicaid enrollees should not be lessened and that a subsidy program for coverage should be implemented only after Medicaid is expanded to maximum federal levels. She stated her support for clarification that the individual mandate will be satisfied by coverage through other public health care programs and stated that community health centers must be included in the VBPs provider networks. She asked that the bill be amended to specify a process for how affordability of VBPs is determined and what the subsidies should be.

11:24 AM -- Steve ErkenBrack, Rocky Mountain Health Plans, testified that health care reform efforts should build upon the current market and not disrupt it. He stated that the bill will access the expertise of the health care industry through a public/private relationship. He stated that the bill takes a thoughtful approach and that the request for proposals process will capture and address many questions regarding the implementation of VBPs and the effect of VBPs on the small group health insurance market. Mr. ErkenBrack responded to comments from Senator Schultheis regarding the impact of the bill on health insurers.

11:37 AM -- George DelGrosso, Colorado Behavioral Healthcare Council, testified that his organization is taking a neutral position on the bill and discussed his concerns with the bill. He stated that basic health plans usually do not include coverage for mental health treatment, and stated that if VBPs do not include coverage for mental health, it will likely cause a cost shift. He further questioned what the impact of the bill will be on safety net providers, and asked for an assurance that community mental health providers would be part of the delivery system under VBPs.

11:39 AM -- Elisabeth Arenales, Colorado Center on Law and Policy, testified that her organization is taking a neutral position on the bill. She noted that health insurers are to participate in the development of the request for proposals process, and there may be possible conflicts of interest if the insurance industry is both designing the request for proposals process and submitting proposals under the process. She asked the committee to consider creating a back-up plan if no proposals are submitted. She asked the committee to consider what kinds of cost controls may be placed on the health insurance industry and asked for clarification as to how costs will be controlled over future years. Ms. Arenales cautioned that there is a large potential for administrative cost increases through the bill's process. She stated that the committee needs to make a determination as to whether the CoverColorado program is to be incorporated into the VBP process.

11:48 AM -- Tony Gagliardi, National Federation of Independent Business (NFIB), testified that over the past 15 years, health care has ranked among the top issues for small business owners. He stated that NFIB is in conceptual support of the bill, but has no position on the individual mandate. He stated that health care reform plans should involve evidence-based medicine and telemedicine. He asked that discussions regarding a source of revenue to fund health care reform efforts involve small business owners.

11:53 AM -- Michael Huotari, Colorado Association of Health Plans, distributed a handout to the committee (Attachment E). He stated that the status quo is unacceptable, and that the solution to creating coverage for the uninsured lies in both public and private efforts. He described the elements the association supports with regard to health care reform efforts. He emphasized that health care reform efforts and health insurance products must be affordable. He stated the bill is important because it continues a debate and discussion that started with the 208 Blue Ribbon Commission on Health Care Reform. He stated that the bill is practical and realistic and builds on the existing health care system.

11:58 AM -- Sheila Hicks, Colorado Cross Disability Coalition, distributed a handout to the committee (Attachment F). She stated the purpose of health care reform should be to improve health outcomes. She expressed concern that the availability of VBPs may exacerbate the provider shortage for Medicaid clients. She stated that the availability of VBPs might lead individuals to believe they have more coverage than is actually provided through the VBPs.

12:02 PM -- Edwin Perkins, Christian Science Committee on Publication for Colorado, testified in support of a religious exemption from the individual mandate for persons who practice spiritual and non-medical healing. Senator Hagedorn and Senator Schultheis discussed the inclusion of a religious exemption in the bill.

12:06 PM -- Brian Schwartz, representing himself, discussed differences with the health care systems in the Netherlands and in the United States. He testified that methods should be developed to make sure uninsured persons pay their bills, rather than requiring everybody to purchase health insurance. He asked if the VBPs would be required to offer mandated health benefits, and stated his concern that some products in Colorado's market would still be subject to state mandates while VBPs would not.

12:09 PM -- Denise DePercin, Colorado Consumer Health Initiative, discussed some elements of the bill which, in her opinion, raise issues or need to be clarified, including the individual mandate and the appropriate role for consumers in the process created by the bill.

12:11 PM

Senator Hagedorn gave concluding remarks regarding the bill. He specifically responded to comments from the witnesses regarding the benefit packages available through the VBPs, inclusion of specific providers in VBP provider networks, the inclusion of health insurance companies in statewide health reform, mental health benefits, and Medicaid crowd-out. He stated that Colorado does not have the resources to provide a Medicaid-like benefit package for all residents. Amendments L.002, L.003, and L.004 (Attachments G through I), were distributed to the committee.

Senator Hagedorn explained amendment L.002 (Attachment G). The amendment encourages the use of community health centers and other safety net providers in VBP provider networks.


BILL:	SB08-217
TIME:	12:15:31 PM
MOVED:	Hagedorn
MOTION:	Adopt prepared amendment L.002 (Attachment G). The motion passed without objection.
SECONDED:
		VOTE
	Cadman
	Mitchell S.
	Sandoval
	Schultheis
	Tochtrop
	Boyd
	Hagedorn
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

12:17 PM

Senator Hagedorn explained amendment L.003 (Attachment H) which makes technical amendments, including allowing health insurance plans to participate in the request for proposals process for VBPs prior to obtaining a certificate of authority from the state Division of Insurance, but requiring the insurer to obtain the certificate of authority prior to offering a VBP to consumers.


BILL:	SB08-217
TIME:	12:17:18 PM
MOVED:	Hagedorn
MOTION:	Adopt prepared amendment L.003 (Attachment H). The motion passed without objection.
SECONDED:
		VOTE
	Cadman
	Mitchell S.
	Sandoval
	Schultheis
	Tochtrop
	Boyd
	Hagedorn
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

12:20 PM

Senator Hagedorn explained amendment L.004 (Attachment I), which clarifies the individual mandate portion of the bill. As amended, all Coloradans would be required to obtain credible health insurance coverage, either through a state-sanctioned VBP, another health insurance product, or a state or federal program providing health insurance coverage.


BILL:	SB08-217
TIME:	12:20:09 PM
MOVED:	Hagedorn
MOTION:	Adopt prepared amendment L.004 (Attachment I). The motion passed without objection.
SECONDED:
		VOTE
	Cadman
	Mitchell S.
	Sandoval
	Schultheis
	Tochtrop
	Boyd
	Hagedorn
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

12:22 PM

Senator Mitchell moved a conceptual amendment to allow health insurers to respond to the request for proposals with an assumption that an individual mandate will not be required. Senator Hagedorn and Senator Mitchell discussed the amendment.


BILL:	SB08-217
TIME:	12:22:11 PM
MOVED:	Mitchell S.
MOTION:	Moved a conceptual amendment to allow health insurers to respond the request for proposals for VBPs with an assumption that an individual mandate will not be required. The motion was withdrawn.
SECONDED:
		VOTE
	Cadman
	Mitchell S.
	Sandoval
	Schultheis
	Tochtrop
	Boyd
	Hagedorn
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Withdrawn


BILL:	SB08-217
TIME:	12:25:32 PM
MOVED:	Hagedorn
MOTION:	Refer Senate Bill 08-217, as amended, to the Committee on Appropriations. The motion passed on a 5-1-1 roll call vote.
SECONDED:
		VOTE
	Cadman	Excused
	Mitchell S.	Yes
	Sandoval	Yes
	Schultheis	No
	Tochtrop	Yes
	Boyd	Yes
	Hagedorn	Yes
Final YES: 5 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS