Like other states, Colorado is suffering a budget crisis due to the economic fallout of the COVID-19 pandemic.
Stay-at-home orders and other social-distancing policies, which slowed the spread of the novel coronavirus, also dramatically slowed the private economic activity that generates tax revenue. As a result, Colorado lawmakers and Gov. Jared Polis were forced to make more than $3 billion in budget cuts across state government for the current fiscal year, which started July 1.
Ironically, one of the areas targeted for cuts was the health care sector. But some parts of the health care budget fared better than others, for reasons that deserve closer scrutiny.
For example, Colorado state officials made a series of cuts to individual health programs “on top of a 1% cut to Medicaid community providers who offer health care to the state’s poorest residents,” according to Kaiser Health News.
As someone who works with free-enterprise groups and business coalitions in a number of sectors, including health care, I can tell you this 1% cut is a bigger deal than you might think.
According to a staff report from Colorado’s Joint Budget Committee, it represents a $53.1 million reduction in payments to doctors, nurses, hospitals and other caregivers on the front lines of our health care system.
Historically, Colorado’s Medicaid program has paid hospitals 20% to 30% below the actual cost of treating patients. Therefore, cutting reimbursement rates by another 1% makes this already challenging financial situation even more difficult – especially when you consider the number of Coloradans enrolling in Medicaid is expected to surge because of the mass layoffs triggered by the COVID-19 recession.
According to state Rep. Dylan Roberts, D-Avon, lawmakers tried to avoid cutting health care programs as much as possible while also dealing with the immense $3 billion shortfall. “But when you’re looking at across-the-board cuts, everything has to be on the table,” Roberts told Kaiser Health News.
Fair enough. But was everything really on the table?
Consider the case of the Health Care Cost Analysis Task Force. It was established by the legislature in 2019 with an estimated three-year cost of more than $750,000. The task force, housed within the Colorado Department of Health Care Policy and Financing (HCPF), has continued to meet regularly since the state’s budget started melting down in March.
State Rep. Emily Sirota, D-Denver, was the lead sponsor of the bill to create the task force, House Bill 19-1176, and her campaign website makes no secret about its purpose: “Emily is a strong supporter of creating a single-payer Medicare-for-All system in Colorado. That's why she introduced HB19-1176 … to determine how much Colorado pays for care and how much Colorado could save by transitioning to health care for all systems.”
In mid-July, after billions of dollars in state budget cuts had been finalized, Sirota told State of Reform the task force “is still continuing its work in the hopes of coming up with a plan to present to the legislature.” To develop this plan, the task force “employs a consultant to conduct studies” on alternative health care systems in Colorado. “One of those would be a publicly funded, privately delivered system – what you would call a single-payer model that is privately delivered,” Sirota said.
Sirota serves on the task force alongside state employees from HCPF, the Colorado Department of Public Health and Environment, the Colorado Department of Human Services and the Colorado Division of Insurance. T.R. Reid, who represents the Colorado Foundation for Universal Health Care, also serves on the task force. If that name sounds familiar, it’s because Reid was one of the leaders of the 2016 campaign for Amendment 69, which would have created a single-payer healthcare system in Colorado.
Amendment 69 “would have eliminated most private health insurance” in Colorado and replaced it with a single-payer system costing $36 billion per year, according to The Denver Post. To finance the new system, Amendment 69 would have imposed a 10% payroll tax on employers and workers.
Coloradans rejected the single-payer health care ballot measure resoundingly in a 79% to 21% vote, but Reid was undeterred. “We learned a lot. And we’ll definitely be better next time,” he told the Post in 2016.
Even before the COVID-19 recession, it would have been fair to ask: Does Colorado really need a taxpayer-funded task force on single-payer health care when voters have already said they don’t want it?
But today, as the state braces for years of continued budget stress, there’s another question to ponder: Why is HCPF still devoting staff time and other taxpayer resources to this task force when programs that actually provide health care are being cut?
Clearly, some well-placed officials in state government believe the single-payer task force is too important to let go, even in the face of this year’s historic budget cuts. Those officials should step forward to explain themselves and what makes this task force so special.