By Emily Michels, Policy Analyst
One of the hottest topics of debate in the 2016 Colorado Legislative Session has been around the “Hospital Provider Fee.” With opinions almost entirely split along party lines (with a few exceptions), the Provider Fee reclassification, outlined in HB16-1420, will rely on decisions made in the next few weeks by members of Colorado’s House and Senate. Let’s break down what this issue is really about…
The Hospital Provider Fee (HPF), which collects a fee from hospitals based on how many patients they see, was created and approved in 2009, prior to the Affordable Care Act. The fee served as a way to expand Medicaid and coverage for low-income families in Colorado without drawing funds away from other important budget areas; this was all possible because the Federal government offered matching funds to states that collected this fee. These matching funds helped offset hospital costs for treating low-income patients, which used to be passed on to private insurance patients, by providing patients a source of health coverage. The original debate around the Hospital Provider Fee boiled down to one side (mostly Democrats) wanting the state to benefit from the Federal matching program and the other side (mostly Republicans) seeing it as taking advantage of taxpayer money, regardless of the source.
The results of enacting the Colorado Health Care Affordability Act, which put the Hospital Provider Fee into place, are touted as revolutionary for Colorado’s uninsured populations. The fee allowed for at least 23,000 people to get health insurance (according to the Colorado Department of Health Care Policy and Financing), and for the Children’s Health Insurance Program (CHP+) and Medicaid expansion prior to the Affordable Care Act (ACA). The revenue continues to support coverage for expansion populations as well as changes to administratively simplify Medicaid. Even though supporters see many benefits of the Provider Fee, the opposition has remained unhappy with it since its inception. Nowadays, the debate over the HPF has taken a different turn.
Last year, Governor Hickenlooper proposed reclassifying the Hospital Provider Fee under state law so that the fee would not be subject the Taxpayer’s Bills of Rights (TABOR). This year, Speaker Hullinghorst introduced HB16-1420 with bipartisan support, which allows the Hospital Provider Fee to be reclassified as an state-run enterprise not to be subject to the Taxpayer’s Bills of Rights (TABOR). Designating the Hospital Provider Fee as an enterprise frees up money that can now be appropriated toward schools, roads, and other state budget priorities. While this money would not be available immediately for the upcoming fiscal year, millions of dollars would be available for the state fiscal year beginning July 1, 2017. Opponents of the change say that this move would be unconstitutional and that the growth of government caused by the switch would violate TABOR laws.
The debates over the constitutionality of the change have been ongoing since the fee’s inception – many argued that the fee was actually a tax and should have been taken to a vote of the people under TABOR. Several opinions have been released over the years supporting both sides (see a memo from 2008 saying “fee,” one from the Office of Legislative Legal Services released by Republicans in 2015 saying “tax,” and the Attorney General’s go-ahead memo released in February 2016).
With a Democratic House and a Republican Senate, anything controversial is hard to get passed this session. The bill was introduced by Speaker of the House Dickey Lee Hullinghorst, and is strongly opposed by Senate President Bill Cadman. But, while a line is drawn in the sand between parties, there is some crossover – the Hospital Provider Fee bill has a Republican co-sponsor in the Senate, Senator Larry Crowder (who also voted in favor of Medicaid expansion), which many hope will inspire other Republicans to give the bill a chance.
CCHI is actively supporting HB16-1420 and the concept of the redesignation of the Hospital Provider Fee because we believe the enterprise shift would allow more funding to be dedicated toward education, transportation, and other programs through the general fund while still financing needed priorities in health care. Working together, Colorado can continue the successful Hospital Provider Fee that helps ensure Coloradans get the care they need when they need it, and better fund other important state programs.