Tag Archives: Colorado HB 1293

Hey Colorado Pols: Hospitals pass hospital “fee” on to patients

The Durgango Herald reports that Rep. Janak Joshi, R-Colorado Springs has rescinded House Bill 11-1025, which would have repealed the hospital provider fee tax enacted in 2009.

An unnamed blogger at Colorado Pols writes:

We’re more than a little baffled here. Make no mistake, we certainly knew that Republicans were going to take a run at former Gov. Bill Ritter’s 2009 hospital provider fee, despite the fact that it was supported by the hospitals paying the fee, and directly results in matched federal funding that would be lost if repealed.

I’m a little baffled that Colorado Pols thinks that the hospitals are paying this fee.  As economist Linda Gorman noted in her backgrounder on the hospital fee:

The bill proposes a tax on hospital patient revenue, not on total hospital revenue. Patients, not hospitals, will ultimately end up paying this tax in the same way that customers, not corporations, end up paying corporate taxes.

A tax that increases the cost of hospital care will increase the cost of health insurance. It will also increase the cost f Medicare copays. This harms the elderly.

[The Act] stipulates that hospitals may not show the amount of the tax on their billing statements. The exact wording [on page 6] is
(f) A HOSPITAL SHALL NOT INCLUDE ANY AMOUNT OF THE PROVIDER FEE AS A SEPARATE LINE ITEM IN ITS BILLING STATEMENTS.

It’s hard to fathom why the politicians behind this tax stipulate this if the hospitals themselves were paying the fee.

And does hospital tax really bring in matched federal funding – confiscated from taxpayers mostly in other states? Back in 2009, Linda Gorman of the Independence Institute noted:

[T]he [Denver] Post reports that a new hospital fee “would be matched by an equal amount of federal funding.” Simply false. The fiscal note done by the Colorado legislature shows the fee will raise $629,365,211 compared to $508,827,172 in federal funds. Do Brown and Hoover wish to pay to make up that more than $100,000,000 gap?

For a short critique of the hospital provider fee tax, see Linda Gorman’s “Colorado’s Health Care “Affordability Act” should be repealed.” For an in-depth critique, see the issue backgrounder I mentioned above.

For an explanation of who pays corporate taxes, see “Who Pays Corporate Taxes?” by Walter Williams. The Concise Encyclopedia of Economics has has a discussion.

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Colorado HB11-1025 would repeal the phony health care “affordability” act

Colorado HB11-1025 would repeal the hospital provider tax instituted in 2009.  The tax (not a fee) was part of the so-called “Colorado Health Care Affordability Act.”  Linda Gorman of the Independence Institute explains how “If truth in advertising applied to legislation, the act’s title would have landed someone in jail”:

In its first year, [the tax] raised health care costs by levying $340.9 million in new taxes on nursing home and hospital bills. State agencies claim that the tax revenues reduce health care costs by increasing federal Medicaid matching funds for the state. But the state only pays for about 12 percent of total Colorado health care spending according to the Colorado Blue Ribbon Commission on Health Care Reform. If the state gains, it is at the expense of the other 88 percent, the people who pay the bills for everyone else.

Read the whole article at HealthPolicySolutions.org: Colorado’s Health Care “Affordability Act” should be repealed.

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Colorado HB11-1025 Repeal Hospital Provider Fee Tax

Colorado state Rep. Janak Joshi and Senator Kevin Lundberg are sponsoring HB11-1025, which would repeal the hospital provider “fee” instituted in 2009.   Linda Gorman of the Independence Institute explains how the so-called “fee” is really a tax, and hence violates the Colorado Constitution:

The department [of Health Care Policy and Financing] and its allies in the legislature knew that they were instituting a provider tax, but they did not want people to have the opportunity to vote on it. They called it a “fee” instead.

In a letter from John Bartholomew, director of the department’s Budget and Finance Office, … the state assures [Centers for Medicare and Medicaid Services] that “the non-federal share of the proposed Medicaid … payments will be funded solely with fees assessed on hospital providers, which is designated as a provider tax under 42 CFR §433.68.”

A later letter from the Centers for Medicare and Medicaid Services … approves the form of the “tax on certain inpatient hospital patient days,” discusses the “tax structure,” which Colorado will be allowed, and refers to section 1903(w)(3)(C) of the  Social Security Act, which discusses the conditions that a tax must fulfill in order to qualify for Medicaid matching funds.

Media sources were also clear about the fact that Colorado was enacting a provider tax. The headline for an April 28, 2010 article on amednews.com refers to “Colorado’s tax on inpatient and outpatient revenue.”

Read the whole article at HealthPolicySolutions.org: Colorado’s Health Care “Affordability Act” should be repealed.

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Colorado Medicaid: replace matching funds with block grants

Thomas Molitor makes some great points about Medicaid block grants:

State governments administer Medicaid, but they receive an open-ended funding match from the federal government. The federal government pays nearly 70 percent of the cost of the program in New Mexico. …

From a budget perspective, an effective way for the federal government to reform Medicaid would be to turn it into a block grant.

… A block grant would provide a strong incentive for our state to trim its Medicaid program, combat fraud and abuse, and pursue more innovative and cost-effective health care solutions.

The federal government would give each state a lump-sum grant amount each year, allowing federal taxpayer costs to be directly controlled. Federal aid to the states could be ratcheted down over time, but the states would have greater flexibility to design more cost-effective health care programs. …

The open-ended federal match under Medicaid has prompted our state government to continuously expand health care benefits and the number of eligible beneficiaries. New Mexico has designed a complex scheme (like other states*) to artificially raise federally matching payments under Medicaid, and it has come back to bite us in our budget.

In the long run, federal Medicaid spending should be phased out completely. After all, funding for the program comes from taxpayers in the 50 states, so we may as well keep the money in the states and allow each state government to determine what sort of health care policy it wishes to pursue.

Read the whole article: Time to grab the third rail, Madame Governor.

* The hospital provider fee tax (HB 09-1293) is one of these schemes to increase the federal match for Medicaid funds, as Linda Gorman has noted (page 4). Rep. Janak Joshi, R-Colorado Springs seeks to repeal this fee via House Bill 1025.

(Via State House Call)

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Colorado House Bill 1025: repeal hospital provider fee

The Denver Business Journal reports on a bill that would repeal the hospital provider fee tax introduced in 2009:

House Bill 1025, sponsored by Rep. Janak Joshi, R-Colorado Springs, repeals the hospital provider fee established in 2009. The Colorado Hospital Association and Colorado Medical Society have said they will fight any attempt to eliminate the per-patient fee that generates federal Medicaid funds.

See also:

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Correcting the Denver Post on the health care “affordability act”

The II’s Linda Gorman keeps the Post reporters on their toes in this post for National Review’s Media Malpractice blog:

The Denver Post’s Tim Hoover and Jennifer Brown have done a disservice to their readers with their weakly reported April 22 story “Federal funds will help enroll more people in Medicaid.

First, the Post reports that a new hospital fee “would be matched by an equal amount of federal funding.” Simply false. The fiscal note done by the Colorado legislature shows the fee will raise $629,365,211 compared to $508,827,172 in federal funds. Do Brown and Hoover wish to pay to make up that more than $100,000,000 gap?

Second, the Post claims “the bill says hospitals can’t explicitly pass the fees on to insured patients in a line-item on their medical bills.” But the bill imposes a 5.5% fee on all hospital patient revenues. Whether the fee is raised through a line-item or not, hospital patients will be paying for it.

Third, the Post claims the fee will expand coverage “for at least 100,000 more insured people over several years.” But the legislature’s fiscal note only identifies a propable 7,600 disabled buy-in, 43,000 new adults, and 21,000 new SCHIP enrollments. That comes to 71,600 more insured people. But SCHIP research shows that about 60% of SCHIP enrollees already had insurance. So take out 12,600 from the SCHIP number and the new hospital fees will really only cover 56,000 more people … a little more than half what the Post trumpeted.

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Colorado HB 1293: Prepare For More Expensive Medical Insurance

The Daily Camera published my thoughts on Colorado HB 1293:

Prepare For More Expensive Medical Insurance: the Senate Finance Committee has approved Colorado House Bill 1293. The Denver Post claims that this bill would reduce your insurance premiums. Not so. They will increase.

The Post claims HB 1293 would “increase the number of those covered by government insurance and thereby reduce cost-shifting” from the uninsured and under-insured. Sure, this cost-shifting increases premiums costs. But the cost-shift from those with government insurance far exceeds that from the uninsured.

In Colorado, the cost-shift from the uninsured increases annual premiums by $85 per insured Colorado resident. For the data behind this, search on-line for “uninsured cost-shift scam.” Compare this to Medicare and Medicaid: Bloomberg recently reported that “Medicare and Medicaid increase the annual cost of covering a family of four by $1,788.” As if the taxes we must pay to fund Medicare and Medicaid weren’t enough.

If politicians want more affordable insurance they should repeal prohibitions that make it so expensive. For example, HB 1256 would allow Coloradans to buy insurance available in other states. In four states average annual premiums for individual plans cost $500 less than in Colorado. For family plans the potential savings increases to $1,000 in five states, according to America’s Health Insurance Plans.

Government-controlled health care in the U.S. is a disease masquerading as its own cure.

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Colorado HB 1293: Tax Sick People to Create a Hospital Slush Fund

So says Linda Gorman in a new Issue Backgrounder on this bill.  Here’s the summary:

  • Adds a tax of as much as 5.5 percent (the tax is called a “fee” in the bill) to every patient’s hospital bill. The potential revenue raised from the patient tax could cost Colorado’s citizens more than $573,000,000 a year in higher health care costs.
  • Attempts to evade the plain language of TABOR by calling a tax a fee.
  • Requires hospitals to mislead patients about the tax. The bill specifically prohibits hospitals from listing the tax as a line item on patient bills.
  • Significantly expands medical assistance programs without a stable funding base. In some cases, people with median household earnings or income will be eligible for Medicaid.
  • Will increase private health insurance premiums and, potentially, the Medicare costsharing amounts paid by the elderly.
  • Reimburses hospitals for 100 percent of hospital determined costs without adequate oversight.
  • Stops general fund appropriations to hospitals from going below their 2008 levels without being “made up.”
  • Earmarks payments for an unspecified “group facilitator.”

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Colorado HB 1293: “The Colorado Healthcare Affordability Act”

This sounds like a way to get you to pay for other people’s health care, and not address the real problems of high medical and insurance costs.

From the Denver Daily News:

The Colorado Healthcare Affordability Act (CHAA), introduced last week as House Bill 1293 seeks to provide health coverage for up to 100,000 underinsured and uninsured Coloradans, as well as attempt to stop the rollover costs placed on small businesses and the privately insured who pay costs resulting from uncompensated care by hospitals that treat the underinsured and uninsured. …

When Gov. Bill Ritter announced the CHAA on Feb. 26, he called it “fiscally responsible,” saying it would not require general fund expense. Ritter explained the legislation would generate an additional $600 million per year, matched by federal funds, by assessing a provider fee on hospitals.

First, the cost-shift from Medicare and Medicaid are more than the cost-shift from the uninsured. See here, here, and here.  Second, who pays the “provider fee on hospitals”?   As I understand it, the hospitals pass on that cost the the patients, either directly, or through higher insurance premiums.

Also, if some people are “underinsured,” which I grant is possible,  then there must be possible to be over-insured, right?

Instead of more government reforms, how about addressing the real cause; government intervention in medicine and insurance (see here and the posts on the right side bar).

(via Ari Armstrong)

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