Health Care Affordability Act is opportunity for corruption

Author: - April 10, 2009 - Updated: April 10, 2009

Dear Mr. Haugh,

I saw your March 27 article on the Health Care Affordability Act in The Colorado Statesman. While I realize that it is often difficult to digest a more-than-30-page bill, I feel that your readers deserve more accuracy.

The “fee” that you discuss is one that is added to patient revenues, namely patient bills. Hospitals do not pay the tax; people with hospital bills pay the tax. Furthermore, the legislation prohibits this fee from being listed on patient bills. This is a tax on sick people, and the Legislature is keeping it secret.

In the rest of the world, such fees are called provider taxes. That they are called fees in this bill is an obvious attempt to subvert TABOR requirements. The fact that they are generally referred to as provider taxes by the federal government and by other state hospital associations should have been mentioned.

The matching funds that the proposed extra spending will draw do not come anywhere close to $1.2 billion unless the tax is at the maximum 5.5 percent. The fiscal note suggests that the tax will reach $629,365,211 by FY 2012-’13, given a rate of something under 3 percent.

Even if all of this money were spent on Medicaid (a dollar for dollar match) $1.2 billion would be the maximum match possible. In fact, an estimated $418 million will go to hospital payments and state administration costs, leaving roughly $210 million for spending on federally matched programs. The highest match rate is $2 for $1 under the SCHIP program, but only $82 million will be spent on that. So, the state is charging people who pay for their own health care an extra $630 million in order to get less than $600 million from the federal government. This may be a good deal for the state; it is not a good deal for responsible people who pay for their own health care because it will raise their insurance premiums and Medicare co-payments.

Plus, many of the people it is extending coverage to already pay for their own health care — an estimated 60 percent of children enrolling in SCHIP previously had private insurance, but their parents dropped it to pay the much less expensive SCHIP premium of $35 a year.

Most of the fees will go to hospitals. There are no controls on what the hospitals can use the money for and no public reporting requirements. This is asking for corruption.

Linda Gorman
Independence Institute