Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

FACT SHEET MEMORANDUM

SB 12-032 Medicaid & CHIP Eligibility Changes & SSA Compliance Waiver Sen. Brophy Staff Name: Gaby Corica What the Bill Does: SB 12-032 mandates that the Department of Health Care and Financing seek a federal waiver of compliance with provisions of the federal Social Security Act (SSA). SB 12-032 seeks to allow the state of Colorado to ask for a waiver of compliance with the standards outlined in the federal SSA as they pertain to Medicaid and the Childrens Basic Health Plan. With this authorization, SB 12-032 seeks to change the programs eligibility requirements by re-establishing threshold income levels and implementing an asset test for applicants. Further, the bill seeks to recalculate program participants premium costs for healthcare services and seeks to discourage use of public healthcare systems by instead guiding consumers toward private health insurance. The bill also authorizes the Department to negotiate a cap on federal reimbursements to Colorado for public health program funding, depending on the states population fluctuation and inflation. Finally, the bill states that the Department shall defer to the state legislature in order to redefine program eligibility requirements. Colorado Context: Presently, in Colorado, applicants to Medicaid and Childrens Basic Health Plan are not required to pass an asset test in order to be eligible.1 SB 12-032 however, reinstates asset tests. This bill seeks to lower eligibility for these programs, yet under the Affordable Care Act, their eligibility cannot be decreased. 2 State health care costs increased rate of 3.9% in 2010.3 This increase is the second lowest rate of growth since the state began keeping track in 1960. National Context: Rhode Island has what is called the Medicaid Reform Act of 2008 and it directs the state to apply for a global demonstration under the authority of Section 1115(a) of Title XIX of the Social Security Act.4
1

Tim Hoover, Republican senators bill would force state to seek Medicaid waiver, allow asset test, Denver Post, (Jan.12, 2012), http://blogs.denverpost.com/thespot/2012/01/12/republican-senators-bill-would-force-state-to-seek-medicaid-waiver-allowasset-test/52861/. 2 Id. 3 Health care spending grows, but at near-record low rate, The Bell Policy Center (Jan. 18, 2012), http://bellpolicy.org/node/4638. 4 Rhode Island Department of Human Services, http://www.dhs.ri.gov/FamilieswithChildren/HealthMedicalServices/MedicaidGlobalWaiver/tabid/399/Default.aspx, (last visited Jan. 29, 2012).

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For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.

The Rhode Island Global Consumer Choice Compact 1115 Waiver Demonstration, or Global Waiver, is aiming to give the state greater flexibility in determining public health program eligibility.5 Rhode Island requested the waiver from the federal government and in the final days of the Bush presidency in 2009, the waiver was granted. Rhode Island agreed to a global cap on expenditures over five years of $12.075 billion in exchange for broad reform authority. According to the states Office of Health and Human Services, after 18 months, Rhode Island's Medicaid spending was projected to reach $3.8 billion but instead has declined to $2.7 billion. The state implemented a number of health care reforms like wellness programs, co-payments, audits of hospitals and nursing homes, fraud prevention. Critics of the global waiver however, claim that $400 million in stimulus money that the state received saved Rhode Island Medicaid's program (not the waiver).6 Arizona also has a Health Care Waiver Request Act. The bill, AZ S. 1001, a 2011 Health Care Waiver Request, was signed into law by the Governor of Arizona on January 21, 2011.7 Meanwhile, several states are pushing for legislation to either block and restrict or implement and expand the Affordable Care Act.8 Bill Provisions: Requires that, on or before September 1, 2012, the states Department of Health Care and Financing request a waiver of compliance with the federal Social Security Act with regard to Colorados Medicaid and Childrens Health Insurance programs. This waiver would authorize the state to rewrite the eligibility requirements for these state-run programs by: o Implementing an applicant asset test. o Changing minimum income level requirements. o Adding other eligibility standards. Give the legislature power to review the amount of premiums that Coloradans covered by Medicaid and Childrens Basic Health program are asked to contribute. Allow the Department of Health Care and Financing to negotiate a fixed rate of federal funding for the states public health care programs. Fiscal Impact: The Colorado Legislative Council estimates that this bill will increase state expenditures by $179,122 and 1.6 FTE in the 2012-2013 fiscal year and at least $203,669 FTE in the 2013-2014 fiscal year. If this bill is passed and the waiver is approved, the state is anticipated to increase its share of General Fund used to pay medical services premiums by $49 million in the 2013-2014 fiscal year and $2.9 million in the 20142015 fiscal year. The Colorado Legislative Council also states that these expenditures could be offset as a result of restructuring the Medicaid and Childrens Healthcare Programs.9

5 6

Id. Rhode Islands Medicaid Lesson, The Wall Street Journal, March 28, 2011, http://online.wsj.com/article/ SB10001424052748704893604576198710204114624.html 7 National Conference of State Legislatures, http://www.ncsl.org/issues-research/health/health-reform-database-2011-12state-legislation.aspx (last visited Jan. 26, 2010). 8 Id. 9 Kerry White, Fiscal Note: SB 12-032 (Jan. 18, 2012), available at www.leg.state.co.us/clics/clics2012a/csl.nsf/fsbillcont3/39798175846B012987257981007DC9C6?Open&file=SB032_00.pdf .

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For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.