Tuesday, May 13, 2008

Take $419,953 From Roads to Raise Health Care Costs 

Business as Usual at the Colorado Statehouse

By Linda Gorman

Categories:  Colorado

In the annual General Assembly spend fest, this year’s Colorado legislature has sunk to new depths by diverting money from the state highway budget to fund regulations that will increase health care costs.

While the roads and bridges crumble, Colorado politicians have already  begun the campaign for future tax hikes. They are expected to claim that the state’s infrastructure needs more funding.

This year’s legislative majority was clearly not satisfied with the fact that Colorado’s relatively lightly regulated individual health insurance market functions quite well compared to certain other states, with the fourth highest percentage of people enrolled in HSA eligible high deductible health plans among the 50 states. Hostile to insurance companies in general, and to health insurance companies in particular, it decided to divert taxpayer funding to HB 1389, a statute that lets the state set health insurance prices.

Thanks to these hardworking Colorado legislators, the state Department of Insurance can disapprove rates if profits are “unreasonably high.” It can disapprove rates if profits are unreasonably low (“clearly insufficient to sustain projected losses and expenses”).

The state can reject any rate increase judged “excessive, inadequate, unfairly discriminatory,” based on “The Commissioner’s” opinions about “profits, dividends, annual rate reports, annual financial statements, subrogation funds credited, investment income or losses, unearned premium reserve and reserve for losses, surpluses, executive salaries, expected benefits ratios…and any other appropriate actuarial factors.”

Regulating by Commissar whim costs money. According to the fiscal impact statement accompanying the bill, Department of Insurance employees currently spend about half an hour reviewing rate filings. Department actuaries then spend about 3.5 hours in further review. Under the new rules, the initial review time will increase an estimated 1,000 percent, to an estimated 5.5 hours. The actuarial review time will increase by 186 percent, from 3.5 hours to 10 hours per filing.

Overall, the bill will increase state government costs by an estimated $620,652. An estimated $419,583 of that will be funded by reducing “the annual diversion to the Highway Users Tax Fund” in FY 2008-2009.

As no government expansion is free, policy holders will no doubt also have to pay higher premiums to defray the costs imposed on insurers stuck with having to interface with the 8 new state employees hired to carry out this monument to regulatory uncertainty.

In the midst of spending one of its biggest tax increases ever, the Colorado legislature can think of nothing better to do than give Colorado residents higher health insurance costs by reducing road maintenance.

In the immortal words of P.J. O’Rourke, giving money and power to government is like giving whiskey and car keys to teenage boys.

• posted by Linda Gorman
• 3:21 pm
• 0 comment

Wednesday, May 7, 2008

Colorado House to Make Insurance More Expensive 

By Merrill Matthews

Categories:  Colorado

The NAIC and many states have begun to change the way the departments of insurance do business with their insurance carriers, including an expansion of states that allow insurers to file forms and rates and use them immediately. Colorado, on the other hand, is looking backward by increasing the bureaucratic processes to review health insurance rates.

The Colorado House has passed H.B.1389, a bill which will require health insurance carriers to file their rates with the department before implementing the new rates. The bill establishes unreasonable loss- ratio guidelines, requires carriers to file rates in advance of implementation, and allows the department broad discretionary authority to review those rates. Such burdensome regulations will only drive up taxes and force insurers to pay higher administrative costs -- all in the hope of lowering the cost of health insurance.

Unfortunately, Coloradans will face higher taxes, and insurers higher administrative expenses, for the state's burdensome regulation of something that is better solved by a competitive marketplace.

• posted by Merrill Matthews
• 10:24 am
• 1 comment

Thursday, May 1, 2008

New to the Links Page 

By John LaPlante

Categories:  Colorado

Please welcome PatientPowerNow.Org to the links page of State House Call. Gotta love that tag line: Because your health care is too important to be left to politicians.

The site has a focus on Colorado, but its valuable extends beyond the state. Check it out. 

• posted by John LaPlante
• 7:36 am
• 0 comment

Thursday, December 6, 2007

Comparative Health Insurance Premiums--Regulated Massachusetts, Unregulated Colorado 

But I'm from the government and I'm here to help!

By Linda Gorman

Categories:  Colorado

Massachusetts health care and insurance are regulated to death. So the government had to step in, as in “I’m from the government and I’m here to help,” first to control insurance prices and guarantee issue in the 1990s and then to pass the Commonwealth’s 2006 health care reform plan that gave various bureaucracies almost complete control over all medical practice and of all the health insurance outside of ERISA plans.

Colorado health insurance is only half regulated to death—a number of insurers still offer policies in the state’s individual market. Policies are medically underwritten and flexibly priced. Were people in Massachusetts helped by government? The table gives prices quoted this week under the Massachusetts plan for people living in Boston, in the Colorado individual market for people living in Denver, and for Denver residents in Cover Colorado, the state’s guaranteed issue plan for the uninsurable.

The lesson?

“I’m from the government and I’m here to help” remains one of the three biggest lies in America.

 

A Comparison of Massachusetts and Colorado Monthly Health Insurance Premiums
	Colorado individual market (80222)	Cover Colorado guaranteed issue	Massachusetts (02101) Guaranteed issue
10 year old child	$102.00	$125.30	$193.81	$2,000 deductible
40 year old man	$172.00	$250.18	$246.10	$2,000 deductible

 

• posted by Linda Gorman
• 2:47 pm
• 2 comments

Thursday, September 20, 2007

Colorado Commission: We Need Cash 

By John LaPlante

Categories:  Colorado

Maybe it's a sign of things to come: a commission given the task of coming up with recommendations for reforming health care in Colorado says that it ... needs more money.

Health reform panel faces woes, an article in the Rocky Mountain News, reports on the latest in the workings of the Blue Ribbon Commission for Health Care Reform. Its chairman says that the group has gotten one-tenth of the funding it should have. And the proposals being touted by the commission aren't any better.

On a recent panel discussion, one participant actively called for at least one government program to be accepted as not health care, but welfare: "John Sackett ... suggested changing Medicare from an entitlement program to a welfare program. 'Those who are of means are going to have to contribute to the solution, not the problem.'"

A proposal for a single-payer system is still a strong possibility. My disgust was mixed with amusement when I read about the logical leap offered by one of its advocates. He "argued that doctors would remain in the private sector and that single-payer would reduce bureaucratic inefficiencies."

Forget for the moment the point about "reducing bureaucratic inefficiencies." If doctors are in a "single-payer system" in which the payer is government, are they really in the private sector?

• posted by John LaPlante
• 11:24 am
• 2 comments

Wednesday, August 22, 2007

Fantasy Cost Estimates Drive Colorado Plan 

By Linda Gorman

Categories:  Colorado

Want to put lipstick on the single payer pig? The Lewin Group is the group for you. It has just finished yet another 230-page final report on the cost of reforming a state’s health care system. Once again, its out-of-date model rediscovers the magic of single payer.

According to the model, to reduce health spending in Colorado by $1.4 billion per year all the Colorado legislature has to do is wave its statutory magic wand. And pass single payer.

It gets better.

The savings will come by providing Medicaid benefits for all. On paper, Medicaid benefits are richer than private insurance plans or Medicare. In practice, people can’t get care because payments are below costs. But they have insurance and that, in the wonderland of health care policy, seems to matter the most.

Marvelous management by a 15-member unelected governing board will vastly improve health care quality. In the single-payer magic kingdom that was modeled, every resident will be covered automatically (no citizenship required), out-of-pocket costs for health care will be less than the cost of going to the movies: Co-pays are $15 for inpatient hospital stays, office visits at $2 go for less than the cost of a gallon of gas, and brand name prescription drug will cost less than a gallon of milk at $3 per script. Coverage will be richer, with unlimited long-term care, home health care, maternity, substance abuse and physical therapy. And there will be no lifetime limits on payouts.

The level of unreality prevailing is such that in response to a request to explain any existing Colorado benefit package similar to the ones being proposed, the authors of the single payer plan wrote that “Medicare, a publicly financed universal health care system, has operated successfully since 1965,” and “The University of Denver Student Health Service, a single-payer universal health care system, has operated successfully since 1947.”

Common sense says that the savings estimates offered by the Lewin Group are a poster child for GIGO. That the company keeps getting hired to produce them shows that there is no end to those who fantasize about utopian government, and who have pockets deep enough to pay $300,000 for modelers who reflect their beliefs.

• posted by Linda Gorman
• 2:47 pm
• 2 comments