DENVER – Colorado Senate Republicans want to repeal the ailing Colorado health exchange and move Coloradans to the federal exchange that was created with the Affordable Care Act.
Sen. Jim Smallwood, R-Parker, said Thursday he is sponsoring Senate Bill 3, which is scheduled to go before the Senate Finance Committee on Tuesday, because of additional fees incorporated in the exchange’s funding, the growing cost of premiums, and the reduction of options and providers for Coloradans enrolled in the exchange’s plans.
“I’m nervous for the citizens of our state that live in the, what I believe are now 19 counties, that are now down to only one health insurance company,” Smallwood said.
The idea that the remaining companies might withdraw is concerning, and points out the failures of the system, he said.
“There appears to be some obvious failures, systemically, within the idea of our state-based exchange, and my thought was ‘would the same thing happen if we were on healthcare.gov?’” he said.
By repealing the exchange, Smallwood believes residents would see a reduction in a redundant fee, as Coloradans pay federal taxes for the ACA and state taxes for the exchange, and an increase in the state general fund after closing of a tax loophole open to insurance companies.
The loophole is a $5 million donation that insurance companies pay into the exchange that is a credit toward the insurance premium taxes they pay to the state, he said.
While some Democrats agree that the financial health of the exchange must be evaluated, the national uncertainty around health care coverage makes this poor timing for SB 3, said Sen. Irene Aguilar, D-Denver. Congress and the Trump administration are working to repeal the ACA, also known as Obamacare, but have not unveiled a replacement.
“There is so much that is in turmoil and chaos right now that I would personally just as soon wait until we know what Washington is going to do,” Aguilar said.
The transition between the two exchanges is also more complex than the picture Smallwood paints, Aguilar said.
Smallwood said the wait and see approach is dangerous, however, and he is not willing to let Coloradans continue to foot the bill for the exchange, while waiting for Washington’s decision on the ACA.
“I can’t look my constituency in the eye and say ‘this is a good cost-benefit trade-off.’”
Aguilar said she would not be opposed to repealing the exchange if it was the responsible financial option, but is concerned about the loss of the effort that went into making it function and the implications for those on the exchange.
“If this does have to happen in the future because of financial reasons, I wouldn’t be opposed if we had made a ready-made plan for how we’re going to do that, how we are going to minimize the effect on our consumers, because it’s been a long time getting to where we are.”
Smallwood’s efforts with the bill might be for naught as most Democrats see a repeal of the exchange as a nonstarter unless there is a clear replacement.
“We’ll fight that. That’s not healthy for the people of Colorado, to just take something out without replenishing it,” Sen. Lucía Guzmán, D-Denver, said when the bill was announced on the first day of the session.
That was affirmed by Gov. John Hickenlooper in his State of the State speech earlier this month when he said Coloradans had a right to some level of state-sponsored health insurance and he would not let the exchange die without a replacement.
“If changes are inevitable, I will fight for a replacement plan that protects the people who are covered now and doesn’t take us backward,” Hickenlooper said.
The Republicans do not have a replacement plan if it is repealed, which would take effect on Jan. 1, 2018, if the bill passes.
Smallwood said while he cannot guarantee that premium costs and access to provider options would increase, he doesn’t see it deteriorating.
“I don’t think that it could be any worse. If it was proven to me that it was going to be worse, again, I wouldn’t carry the bill,” he said.
SB 3 has no sponsorship from Democrats, and Smallwood said he doesn’t see that changing anytime soon.
Without bipartisan support the prospects of the bill making it through the Democrat-controlled House is dubious.
lperkins@durangoherald.com