DENVER (CBS4) – It may be the boldest move yet to lower our health care costs in Colorado. Some state lawmakers want to limit how much doctors and hospitals are reimbursed on the individual market.
They say it will lower premiums by 15-30 percent as early as next year. For Brin Goldberg, who lives on the Western Slope, it would be life changing.
“I was in the ER for about an hour. I received an IV of fluids, some pain reliever and a blood test and was charged $8,000.”
Health care costs in Colorado’s mountain communities are among the highest in the country. Tamara Drangstveit, a health care advocate at the Family and Intercultural Resource Center in Breckenridge, says Coloradans in Summit County spend on average 30-40 percent of their income on health care.
“When I tell you that health insurance in Summit County is a crisis, I’m not using hyperbole.”
It’s why Summit County Rep. Julie McCluskie and Mesa County Rep. Janice Rich have teamed up on bill that could dramatically lower the cost of health care on the Western Slope. It’s a top priority for Gov. Jared Polis, who attended a press conference about the bill.
“It’s really a win-win because, guess what, when prices come down, families can afford insurance.” He says fewer uninsured Coloradans lowers health care costs for everyone.
The bill is aimed at around 5 percent of people with chronic conditions who make up about 50 percent of health care costs. When their claims reach a certain amount, insurance companies would pay providers and hospitals less money for their care.
The money insurers save would then be passed onto everyone in lower premiums. Katherine Mulready with the Colorado Hospital Association says some hospitals will be forced to cut services.
“We don’t believe that the government should tell private insurance companies how much to pay hospitals, doctors, nurses and other medical providers.”
But McCluskie says the health care system doesn’t operate under free market principals now. Medicare and Medicaid reimbursement rates are set by the government. She also says bill makes exceptions for struggling hospitals, primary care and mental health providers.
“We are working aggressively to get this passed and into place so that by January of 2020 our working families will experience a reduction in health insurance premiums and we can take the pressure off what so many Coloradans are facing.”
Coloradans like Brin Goldberg, who begged lawmakers to pass the bill, said, “It would mean so much for me and other community members to be able to rest assured that we don’t have to continue to ask ourselves, how much is our mental and physical health worth.”
The bill only applies to people who are insured on the individual market – about 30 percent of Coloradans. The Colorado Medical Society has not yet taken a position on the bill. If it passes, the state would need a waiver from the federal government before implementing it.
Jim Lynch mastered the fake yawn, stretching out his arm and bringing it to his mouth during class, then pausing to pull a drag from the Juul tucked up the sleeve of his sweatshirt. The high school junior held the vapor in his mouth for 10 seconds, waiting for it to evaporate before he took another breath.
It’s called “ghosting,” and the result is no vapor puff. No scent of mint or mango, his go-to Juul flavors.
All was cool until the day Lynch, a student at Wheat Ridge High School, got caught by his choir teacher, who returned to the room sooner than expected and in time to see Lynch exhale a cloud. The otherwise well-behaved kid got an afternoon of detention.
Colorado has the highest rate of vaping teenagers in the nation at 27 percent, double the national average, according to the Healthy Kids Colorado Survey. Local communities — particularly in mountain and rural towns, where rates are the worst — are desperate to take matters into their own hands.
Legislation nearly to the governor’s desk could give them far broader powers, including the authority to raise the legal age for sale of nicotine products to 21 and require stores to purchase licenses in order to sell cigarettes or vape products.
“If an adult wants to smoke, that is their business,” said Rick Ritter, executive director of the Otero County Health Department in Southern Colorado. “But it is illegal for kids to smoke. They don’t make the smartest decisions. They think what they do now will not affect them later in life. My message is, it will.”
After Lynch got caught by his teacher, the 17-year-old knew it was time to kick the habit he’d started in eighth grade, when a friend offered him a smoke as they walked home from school. He was buying Juul pods online for about $10 each, going through one pod about every three days.
“My thoughts were, ‘When is the next time I can step outside and smoke or go to the bathroom to Juul,’ ” said Lynch, who quit two months ago. “I stopped focusing on what I wanted to do after school.”
Each pod contains as much nicotine as a pack of cigarettes. But when Lynch’s dad found out he was vaping, the teen told him it was just flavored smoke with no nicotine — and his dad believed him. Lynch told his father he only did it to look cool, and that part was no lie.
“It’s 100 percent one of the things to do to be cool and fit in,” he said.
DENVER — Local governments would be able to assess their own taxes on tobacco products without losing what revenues they already receive from the state under a bill working its way through the Colorado Legislature.
Under current law, local governments that assess their own fees, licenses or taxes on the sale of any tobacco product forgo their portion of cigarette tax revenues collected by the state, 27 percent of which are distributed to municipalities and counties based on sales in their jurisdictions.
House Bill 1033, which cleared the Colorado House and now awaits debate in the Senate, would change that.
But the two sponsors of the bill didn’t introduce it so local government can find a new revenue source. They introduced it to allow counties and statutory cities to ban the sale of e-cigarettes to minors, as home-rule municipalities are already allowed to do.
Local governments that want to keep minors from the so-called practice of vaping would jeopardize their tobacco tax revenues, so it’s become a disincentive to ban the practice, said Lakewood Democratic Reps. Kerry Tipper and Chris Kennedy, who jointly introduced the bill.
“We’re trying to give parity amongst all local governments,” Tipper said. “For example, we had a young lady, I think she was 16 or 17 years old, who testified from Eagle County that her friends and many of the kids she knows in school as young as 11 get access to these e-cigarettes. It’s unbelievable.”
That measure isn’t the only one related to nicotine that the Legislature is considering. House Bill 1076, which has not yet been heard in committee, would add electronic smoking devices that contain nicotine to the Colorado Clean Indoor Act, which banned smoking in most public places.
A bill to require hospitals to open up their financials for state and public inspection passed through the Colorado House of Representative on Thursday after the trade group for state hospitals agreed to support it — the second major instance this week of a business group dropping years-long opposition to a proposal that seems almost definite to pass through the newly Democratic-controlled Legislature.
The Colorado Hospital Association gave its support to House Bill 1001 after sponsoring Rep. Chris Kennedy, D-Lakewood, added five amendments during debate on the House floor this week to allow institutions to shield proprietary information on acquisition prices for facilities and physician practices and to limit their mandate to turn over per-hospital financial audits when the audit is done on a parent company as a whole. While the changes got CHA on board with the bill, it did little to convince skeptical Republicans who believe the measure’s increased regulations will lead to increased costs and a continuing lack of consumer transparency; Rep. Matt Soper of Delta was the only GOP representative who joined Democrats in voting to move the bill on to the Senate on Thursday.
Still, the agreement between the CHA and Kennedy to get hospitals behind a bill that requires them to open for public viewing everything from their surgical revenues to their overall costs of building new facilities to the amount of unreimbursed care they provided — all so that consumers, employers and state regulators can examine ways to pressure the industry to bring down costs — was a major step in the debate over health costs.
“This bill demonstrates hospitals’ commitment to finding solutions to Colorado’s health-care affordability crisis, and it’s an important first step — but certainly not the last one — to expand transparency into how the health-care market works,” CHA senior vice president Katherine Mulready said in a statement after the amendments were added to the bill on Tuesday.
Newly inaugurated Gov. Jared Polis has made health-care affordability his top priority during his first month in office, so much so that he issued an executive order last week creating an Office of Saving People Money on Health Care, listing passage of the hospital transparency act as one of its primary aims.
While health-care costs are rising across the board, many business leaders in particular have begun to focus on hospitals as a particular sore spot. A Colorado Business Group on Health study that Denver Business Journal detailed last year showed that privately insured patients are paying 66 percent more on average than Medicaid and Medicare patients at facilities throughout the state and that some common procedures cost as much as seven times the rate of Medicare reimbursement as they are billed to private payers.
House Minority Leader Patrick Neville, R-Castle Rock, criticized HB 1001 because it allows state regulators to see aspects of hospitals’ finances to which they’ve never had access before, but it does very little to increase transparency to consumers of why the costs on their bills can be so high.
Kennedy said that because only a limited number of consumers price-shop when getting health care — and then, it’s largely on elective procedures — he believes that allowing state-government leaders to understand hospitals’ pricing and spending can help them to craft policies that can bring down costs for all residents.
The CHA’s backing of HB 1001 came the same week that major business groups such as the Colorado Chamber of Commerce and National Federation of Independent Business dropped what had been three years of opposition to a proposal to prohibit employers from asking on application forms whether job seekers have criminal records. The groups went neutral on the “ban the box” bill after getting several concessions from its authors, including a provision that disputes involving criminal-record inquiries must go to a state administrative board rather than be adjudicated in court.
Colorado’s House has passed legislation to require hospitals to provide annual reports on their spending and their uncompensated patient care costs.
Democratic Rep. Chris Kennedy’s bill is designed to allow state officials to study why privately insured individuals are paying more for care while the state and federal governments are spending hundreds of millions of dollars to support hospitals, especially in rural areas.
Kennedy says hospital care comprises about 40 percent of total health care costs in Colorado. His bill directs the Department of Health Care Policy and Financing to compile the annual transparency report.
John Batholomew, the department’s chief financial officer, testified at a bill hearing that in 2017, Colorado’s hospital prices were 23 percent above the national average.
A bill requiring hospitals to disclose certain financial information is headed to the state House floor.
Titled “Hospital Transparency Measures To Analyze Efficacy,” and sponsored by Rep. Chris Kennedy, D-Lakewood, the bill would mandate the disclosure of expense reports, patient revenue, available beds, emergency department admissions and more. Some of that information would be posted in an annual report on the Department of Health Care Policy and Financing’s website.
“This bill will ensure our continued support for rural hospitals and to prepare hospitals for the future in which they are reimbursed for value, not volume,” Kennedy said in a statement.
Lawmakers will consider the legislation Jan. 25, along with several other bills, including a bipartisan effort to include funds for career and technical education in a state grant program.
Colorado’s new legislative session is underway, with Democrats in charge of both chambers and the governor’s office. Blue control might be a game changer for health care legislation. Before, it was a stalemate. Democrats controlled the House and blocked Republican bills. The GOP controlled the Senate and blocked Democratic bills.
Nonpartisan nonprofit Colorado Health Institute tracked about 80 Democratic-proposed health bills that died in a Senate committee in recent sessions. But now, CHI spokesman Joe Hanel said, “you have one party that controls the levers of power, so they’ll be able to do a lot more than they had in the past four years.”
If the majority party just dusted off those earlier bills and ran them again, that’s a big agenda already, Hanel said. Unlike before, Democrats can now propose and pass their own health care agenda. They’ll offer an ambitious slate of proposals on a variety of things, from costs to insurance to opioids to e-cigarettes to mental health.
“This is a progressive group of Democrats, led by a very progressive governor with Jared Polis,” he said. “You saw a lot of voters come out and vote for them, and I think Democrats do feel like they have a mandate to do big, transformational things.”
“Now, we don’t want to give this office a bureaucratic or fancy name to make it sound important,” Polis said. “We want to give it a simple name because it is important.”
The new office aims to reduce patient costs for hospital stays and expenses, improve price transparency, and make health insurance more affordable.
Democrats want to reduce high prescription drug costs, possibly by importing medication from Canada. Another problem, sky high insurance costs in mountain communities, might be solved by the creation of a reinsurance market, basically insurance for insurance companies to bring costs down and help pay for the most expensive patients.
“We have hospitals that in some cases operate monopoly power,” he said. “So they’ve been able to basically charge whatever they want and then they’ve been reinvesting those dollars into capital construction projects rather than passing those savings on to consumers.”
Hospitals disagree, and say there are a lot of reasons health costs are so high, many beyond their control. Those include Colorado’s high cost of living and high insurance costs. Republicans see it as government overreach and stopped similar bills in prior years.
There’s no question that rent is a growing concern for Coloradans.
An analysis by Apartment List, a rental listing site, found that half of tenants in Denver spend more than 30 percent of their paycheck on housing. Rates are similar in Grand Junction and Pueblo. It’s even worse north of the metro. Numbers rise to 60 percent in Boulder and 61 percent in Fort Collins.
One potential way to tackle the high costs has been off the table for more than 30 years in Colorado: rent control.
State law bans cities from regulating the rental market. The restriction has forced Colorado communities to find creative ways to add affordable rental units, all while staying on the right side of the law.
Now, State Sen. Julie Gonzales, part of a new class of Democratic lawmakers at the Capitol, hopes to scrap the ban entirely. While the exact language is still in the works, the plan is to introduce a bill to let cities regulate their rental markets.
“I think that municipalities should have a full set of policy options to decide what makes the most sense for them,” she said.
Most states have similar rent control bans. Gonzales’ bill would bring a national debate over those policies to Colorado. A California ballot measure to end limitations failed last November. In Illinois, parts of Chicago have voted to lift the state ban on rent control, as part of a nonbinding effort to pressure state lawmakers.
Depending on who you ask, doing away with Colorado’s prohibition is either the first step to reining in out-of-control housing costs or economic insanity that could actually make housing even less accessible. The proposal will also likely become the left goalpost in a broader debate about Colorado’s cost of living during the 2019 legislative session.
A Far-Reaching Ban
For Denver City Council Member Paul Lopez, the bill is welcome news. The outgoing councilman, now a candidate for city clerk and recorder, joined the council just before the Great Recession. He watched the city go from a housing bust to a building boom, but now worries about who the recovery is really for.
“I see all these cranes in Denver’s skyline,” he said. “And I’d feel a lot better about those cranes if 20, 25 maybe 30 percent of those units were [priced] at an affordable, attainable level.”
That idea is often called inclusionary housing. It’s a catch-all term for policies meant to encourage developers to build more affordable places to live as a part of new construction. Early in his career, Lopez proposed the simplest form of the idea: requiring Denver developers set aside a portion of new rental units as affordable.
“I don’t know how many lawyers told me you can’t do that,” he laughed. “I don’t know how many policy people told me you can’t do that.”
He was told “you can’t do that” due to the interpretation of Colorado’s rent control ban. In 2000, Colorado’s Supreme Court heard a case about a similar policy in the mountain resort town of Telluride. The court decided the rule against price-setting applied to current apartments and new construction. Cities simply could not force the developers to build below-market rental units.
Places like Denver and Boulder still have inclusionary housing ordinances, but because of the Telluride decision, they have to offer developers alternatives to adding affordable units to a specific building. Both cities allow builders to pay for an exemption, which goes into an affordable housing fund.
There are also plenty of rental properties with restricted rents in Colorado. That’s because cities can work with developers to limit rents when they take taxpayer dollars for a project. When public money isn’t involved, landlords are free to price apartments as they see fit.
Andrea Chiriboga-Flor, an organizer with 9to5 Colorado, is part of a coalition of housing and economic justice groups pushing the bill to end the rent control ban. She knows the prospect of rent regulation will set off alarm bells, but said the fear that “people would have to roll back rent costs is just a misconception.”
Chiriboga-Flor listed more common approaches: a cap on year-over-year rent increases or a temporary stabilization of rent. Whatever the policy, she said a city could tailor its approach to its specific housing market. Denver could craft laws to slow gentrification and Telluride could work to preserve worker housing.
Opponents say it’s not that simple.
Teo Nicolais, a landlord and vice president for the Apartment Association of Metro Denver, said he understands that people want to do something about housing costs, but rent control shouldn’t be part of the conversation. He said it’s a policy “which feels good, it sounds good, it’s easy to understand, but rent control has disastrous consequences.”
There’s a reason even liberal economists have no patience for rent control, he said. By setting price controls in the market, a city could discourage developers from building new rental units. For him, it’s basic economics. Prices go up when demand outstrips supply.
Nicolais also cited a Stanford analysis of rent control policies in San Francisco. It found gentrification in the city may have accelerated since new construction is exempt from the limits. That encouraged many developers to replace rent-controlled apartments with high-end units or owner-occupied condos, according to the research.
He doesn’t want to see a similar story play out in Colorado.
“As a Denver Native, as a citizen of this city, and someone who’s kind of a nerd on housing policy, I don’t like to see bad policy,” he said. “And rent control is bad policy.”
Key lawmakers appear to agree with Nicolais. Democratic state Sen. Angela Williams has her own plans on housing, such as a bill to extend the amount of time renters would have to cure a violation for overdue rent.
But letting cities regulate rent increases? Not so much.
“I don’t think cities and counties should be in the business of telling businesses how to run their businesses,” said the northeast Denver senator and chair of the Senate business committee.
Democrats in the Colorado House are also cautious about the idea. Assistant Majority Leader Chris Kennedy said his caucus has a separate package of renter protection bills. It includes policies like reigning in rental application fees and making it illegal for landlords to deny tenants based on their source of income.
“I don’t think there’s any doubt that we are trying to do more to help renters find affordable housing and fund more housing supply,” he said. “I think the question of whether rent control is an appropriate policy is something that bears a lot of conversation before we jump forward.”
That likely means the rent control proposal will be a tough sell, even with Democrats in full control of state government.