BILL TOPIC: "Health Financing Systems Cost Analysis" DEADLINES: Finalize by: JAN 8, 2019 File by: JAN 11, 2019

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1 First Regular Session Seventy-second General Assembly STATE OF COLORADO DRAFT DRAFT LLS NO Kristen Forrestal x4217 Sirota, HOUSE SPONSORSHIP HOUSE BILL (None), SENATE SPONSORSHIP House Committees Senate Committees BILL TOPIC: "Health Financing Systems Cost Analysis" DEADLINES: Finalize by: JAN 8, 2019 File by: JAN 11, 2019 A BILL FOR AN ACT 101 CONCERNING THE CREATION OF THE HEALTH CARE COST ANALYSIS 102 TASK FORCE TO ANALYZE HEALTH CARE FINANCING SYSTEMS IN 103 ORDER TO PROVIDE ADEQUATE HEALTH CARE TO RESIDENTS OF 104 THE STATE. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at The bill creates the health care cost analysis task force (task force). The president of the senate, the minority leader of the senate, the speaker of the house of representatives, and the minority leader of the house of Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment. Capital letters or bold & italic numbers indicate new material to be added to existing statute. Dashes through the words indicate deletions from existing statute.

2 representatives shall each appoint 2 legislative members to the task force. The governor shall appoint 9 members to the task force. The executive directors of the departments of human services, public health and environment, and health care policy and financing, or their designees, also serve on the task force. The task force is required to issue a request for proposals and select an analyst to complete a health care cost analysis of 4 health care financing systems. The health care financing systems to be analyzed are:! The current health care financing system, in which residents receive health care coverage from private and public insurance carriers or are uninsured;! A multi-payer universal health care financing system, in which competing insurance carriers or health maintenance organizations receive payments from a public financing authority;! A publicly financed and privately delivered universal health care system that directly compensates providers; and! A public option system where health benefit plans are sold through and revenues and premiums are received from the Colorado health benefit exchange, with additional funding as necessary through the general fund. The analyst is required to use the same specified criteria when conducting the analysis of each health care financing system. The task force is required to report the findings of the analyst to the general assembly. The task force may seek, accept, and expend gifts, grants, and donations for the analysis. The general assembly may appropriate money to the health care cost analysis cash fund for the purposes of the task force, the analysis, and reporting requirements. 1 Be it enacted by the General Assembly of the State of Colorado: 2 SECTION 1. Legislative declaration. (1) The general assembly 3 hereby finds and declares that: 4 (a) Health care costs continue to rise at unsustainable levels that 5 exceed the rate of economic growth in the United States and that require 6 increasingly large portions of the state's budget; 7 (b) Recent polls of Americans from all demographics indicate that 8 access to affordable health care is a major concern for a substantial -2- DRAFT

3 1 majority of those polled; 2 (c) Colorado's rural residents pay disproportionately higher 3 premiums than urban residents for health insurance and often lack access 4 to adequate health care services; 5 (d) According to a recent Colorado Health Institute study, there 6 are approximately three hundred fifty thousand Coloradans without health 7 insurance, and there are approximately eight hundred fifty thousand 8 underinsured Coloradans with health insurance that may have 9 unaffordable deductibles or that leave them with unaffordable balances 10 to pay that are not covered by health insurance; and 11 (e) Coloradans need facts to determine the most cost-effective 12 method of financing health care that ensures that all Coloradans have 13 access to adequate and affordable health care. 14 SECTION 2. In Colorado Revised Statutes, add article 46.5 to 15 title 25 as follows: 16 ARTICLE Health Care Cost Analysis Act Short title. THE SHORT TITLE OF THIS ARTICLE IS THE "HEALTH CARE COST ANALYSIS ACT OF 2018". DRAFT Definitions. AS USED IN THIS ARTICLE 46.5, UNLESS 21 THE CONTEXT OTHERWISE REQUIRES: 22 (1) "AT-RISK INSURED" MEANS A RESIDENT OF COLORADO WHO IS 23 NOT UNDERINSURED BECAUSE THE INDIVIDUAL HAS FEW MEDICAL NEEDS, 24 BUT WHO WOULD BE UNDERINSURED IF THE INDIVIDUAL DEVELOPED A 25 SERIOUS MEDICAL CONDITION. 26 (2) "DEPARTMENT" MEANS THE DEPARTMENT OF PUBLIC HEALTH 27 AND ENVIRONMENT. -3- DRAFT

4 1 (3) "FEDERAL ACT" MEANS THE FEDERAL "PATIENT PROTECTION 2 AND AFFORDABLE CARE ACT", PUB.L , AS AMENDED BY THE 3 FEDERAL "HEALTH CARE AND EDUCATION RECONCILIATION ACT OF ", PUB.L (4) "PUBLIC OPTION SYSTEM" MEANS A SYSTEM UNDER WHICH 6 EVERY RESIDENT OF THE STATE HAS ACCESS TO ADEQUATE AND 7 AFFORDABLE HEALTH CARE. 8 (5) "TASK FORCE" MEANS THE HEALTH CARE COST ANALYSIS TASK 9 FORCE CREATED IN SECTION (6) "UNDERINSURED" MEANS A PERSON WHO HAS HEALTH 11 INSURANCE BUT HAS UNAFFORDABLE HEALTH CARE COSTS, INCLUDING 12 HIGH DEDUCTIBLES AND OUT-OF-POCKET EXPENSES. 13 (7) "UNIVERSAL HEALTH CARE" MEANS A HEALTH CARE SYSTEM 14 UNDER WHICH EVERY RESIDENT OF THE STATE IS ABLE TO PURCHASE A 15 HEALTH BENEFIT PLAN MANAGED BY THE STATE OR THE HEALTH BENEFIT 16 EXCHANGE CREATED IN ARTICLE 22 OF TITLE Health care cost analysis task force - creation - 18 membership. (1) THERE IS HEREBY CREATED THE HEALTH CARE COST 19 ANALYSIS TASK FORCE FOR THE PURPOSE OF DEVELOPING COMPREHENSIVE 20 FISCAL ANALYSES OF CURRENT AND ALTERNATIVE HEALTH CARE 21 FINANCING SYSTEMS. 22 (2) (a) ON OR BEFORE SEPTEMBER 1, 2019, THE PRESIDENT OF THE 23 SENATE, THE MINORITY LEADER OF THE SENATE, THE SPEAKER OF THE 24 HOUSE OF REPRESENTATIVES, AND THE MINORITY LEADER OF THE HOUSE 25 OF REPRESENTATIVES SHALL EACH APPOINT TWO MEMBERS OF THE 26 GENERAL ASSEMBLY TO THE TASK FORCE. 27 (b) ON OR BEFORE SEPTEMBER 1, 2019, THE GOVERNOR SHALL -4- DRAFT

5 1 APPOINT NINE MEMBERS TO THE TASK FORCE. IN MAKING THE 2 APPOINTMENTS, THE GOVERNOR SHALL ENSURE THAT THE APPOINTEES: 3 (I) REFLECT THE SOCIAL, DEMOGRAPHIC, AND GEOGRAPHIC 4 DIVERSITY OF THE STATE; AND 5 (II) HAVE A DEMONSTRATED ABILITY TO REPRESENT THE 6 INTERESTS OF ALL COLORADANS AND PRESENT OBJECTIVE, NONPARTISAN, 7 FACTUAL, AND EVIDENCE-BASED IDEAS, REGARDLESS OF THE APPOINTEES' 8 BACKGROUNDS OR AFFILIATIONS. 9 (c) THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF HEALTH 10 AND HUMAN SERVICES, THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF 11 PUBLIC HEALTH AND ENVIRONMENT, AND THE EXECUTIVE DIRECTOR OF 12 THE DEPARTMENT OF HEALTH CARE POLICY AND FINANCING, OR THEIR 13 DESIGNEES, SHALL SERVE ON THE TASK FORCE. 14 (3) THE TASK FORCE SHALL SELECT A CHAIR AND VICE-CHAIR FROM 15 AMONG ITS MEMBERS. A MEMBER OF THE TASK FORCE MAY BE REMOVED 16 BY A MAJORITY VOTE OF THE REMAINING MEMBERS OF THE TASK FORCE. 17 IF A MEMBER IS REMOVED, THE ORIGINAL APPOINTING AUTHORITY OR THE 18 APPOINTING AUTHORITY'S SUCCESSOR SHALL APPOINT A NEW MEMBER TO 19 FILL THE VACANCY. 20 (4) TASK FORCE MEMBERS SHALL NOT RECEIVE COMPENSATION 21 FOR PERFORMANCE OF SERVICES FOR THE TASK FORCE OR A PER DIEM BUT 22 MAY RECEIVE REIMBURSEMENT FOR NECESSARY EXPENSES WHILE 23 ENGAGED IN THE PERFORMANCE OF OFFICIAL DUTIES OF THE TASK FORCE. 24 (5) TASK FORCE MEMBERS ARE SUBJECT TO ARTICLES 6 AND 72 OF 25 TITLE Health care cost analysis task force - duties. 27 (1) THE TASK FORCE SHALL: -5- DRAFT

6 1 (a) ON OR BEFORE OCTOBER 1, 2019, ISSUE A REQUEST FOR 2 PROPOSALS IN ORDER TO SELECT AN ANALYST TO PROVIDE A DETAILED 3 COST ANALYSIS OF THE HEALTH CARE FINANCING SYSTEMS SPECIFIED IN 4 THIS ARTICLE THE ANALYST SELECTED MUST HAVE EXPERIENCE IN 5 CONDUCTING HEALTH CARE COST ANALYSES, BE FAMILIAR WITH 6 DIFFERENT METHODOLOGIES USED, AND BE FROM A NONPOLITICAL AND 7 UNBIASED ORGANIZATION. 8 (b) ON OR BEFORE JANUARY 1, 2020, SUBMIT A PRELIMINARY 9 REPORT TO THE GENERAL ASSEMBLY THAT CONTAINS THE ANALYST'S 10 METHODOLOGY FOR STUDYING THE HEALTH CARE FINANCING SYSTEMS 11 SPECIFIED IN THIS ARTICLE 46.5; AND 12 (c) ON OR BEFORE JANUARY 1, 2021, DELIVER TO THE GENERAL 13 ASSEMBLY A FINAL REPORT OF THE TASK FORCE'S FINDINGS RECEIVED 14 FROM THE ANALYST SELECTED PURSUANT TO THIS SECTION. 15 (2) IN CARRYING OUT ITS DUTIES PURSUANT TO THIS SECTION, THE 16 TASK FORCE MAY HIRE STAFF AND CONSULTANTS FOR THE PURPOSES OF 17 THIS ARTICLE Analyst - duties. (1) THE ANALYST SELECTED 19 PURSUANT TO SECTION SHALL DETERMINE THE 20 METHODOLOGY TO BE USED TO STUDY THE HEALTH CARE FINANCING 21 SYSTEMS SPECIFIED IN SUBSECTION (2) OF THIS SECTION AFTER SOLICITING 22 AND CONSIDERING FEEDBACK CONCERNING THE METHODOLOGY FROM: 23 (a) LICENSED PHYSICIANS, NURSES, AND OTHER HEALTH CARE 24 PROVIDERS; 25 (b) MENTAL HEALTH AND SUBSTANCE USE DISORDER PROVIDERS 26 AND ADVOCATES; 27 (c) ORGANIZATIONS THAT PROVIDE HEALTH CARE EDUCATION; -6- DRAFT

7 1 (d) PERSONS WITH DISABILITIES AND ADVOCATES FOR PERSONS 2 WITH DISABILITIES; 3 (e) PATIENT ADVOCATES; 4 (f) REPRESENTATIVES OF MINORITY COMMUNITIES; 5 (g) REPRESENTATIVES OF UNDERSERVED AND RURAL 6 COMMUNITIES THROUGHOUT THE STATE; 7 (h) FAITH-BASED ORGANIZATIONS; 8 (i) EMPLOYERS AND EMPLOYER ORGANIZATIONS; AND 9 (j) EMPLOYEES AND EMPLOYEE ORGANIZATIONS. 10 (2) THE ANALYST SHALL ANALYZE, AT A MINIMUM, THE 11 FOLLOWING HEALTH CARE SYSTEMS: 12 (a) THE CURRENT COLORADO HEALTH CARE FINANCING SYSTEM, 13 IN WHICH RESIDENTS RECEIVE HEALTH CARE COVERAGE FROM PRIVATE 14 AND PUBLIC INSURANCE CARRIERS OR ARE UNINSURED; 15 (b) A MULTI-PAYER UNIVERSAL HEALTH CARE FINANCING SYSTEM, 16 IN WHICH COMPETING INSURANCE CARRIERS OR HEALTH MAINTENANCE 17 ORGANIZATIONS RECEIVE PAYMENTS FROM A PUBLIC FINANCING 18 AUTHORITY; 19 (c) A PUBLICLY FINANCED AND PRIVATELY DELIVERED UNIVERSAL 20 HEALTH CARE SYSTEM THAT DIRECTLY COMPENSATES PROVIDERS; AND 21 (d) A PUBLIC OPTION SYSTEM WHERE HEALTH BENEFIT PLANS ARE 22 SOLD THROUGH AND REVENUES AND PREMIUMS ARE RECEIVED FROM THE 23 HEALTH BENEFIT EXCHANGE CREATED IN ARTICLE 22 OF TITLE 10, WITH 24 ADDITIONAL FUNDING AS NECESSARY THROUGH THE GENERAL FUND. 25 (3) THE ANALYST SHALL PREPARE A DETAILED ANALYSIS OF EACH 26 HEALTH CARE FINANCING SYSTEM. EACH ANALYSIS MUST: 27 (a) INCLUDE THE FIRST, SECOND, FIFTH, AND TENTH YEAR COSTS; -7- DRAFT

8 1 (b) SET COMPENSATION FOR LICENSED HEALTH CARE PROVIDERS 2 AT LEVELS THAT WILL ATTRACT AND RETAIN NECESSARY HEALTH CARE 3 WORKERS; 4 (c) INCLUDE HEALTH CARE BENEFITS REIMBURSED AT ONE 5 HUNDRED TWENTY PERCENT OF MEDICARE RATES FOR COLORADANS WHO 6 ARE TEMPORARILY LIVING OUT OF STATE; 7 (d) DESCRIBE AND QUANTIFY THE NUMBER OF UNINSURED, 8 UNDERINSURED, AND AT-RISK INSURED INDIVIDUALS IN EACH SYSTEM; 9 (e) INCLUDE IN EACH SYSTEM THE PROVISION OF BENEFITS THAT 10 ARE THE SAME AS THE BENEFITS REQUIRED BY THE FEDERAL ACT; 11 (f) DESCRIBE HOW THE SYSTEM PROVIDES THE FOLLOWING: 12 (I) SERVICES REQUIRED BY THE FEDERAL ACT; 13 (II) MEDICARE-QUALIFIED SERVICES; 14 (III) MEDICAID SERVICES EQUAL TO OR GREATER THAN CURRENT 15 REIMBURSEMENT RATES; 16 (IV) MEDICAID SERVICES FOR PEOPLE WITH DISABILITIES; 17 (V) COVERAGE FOR WOMEN'S HEALTH CARE AND REPRODUCTIVE 18 CARE; 19 (VI) VISION, HEARING, AND DENTAL SERVICES; 20 (VII) COLORADO HEALTH EXPENDITURES BY PAYER; 21 (VIII) AFFORDABLE SERVICES IN RURAL AND OTHER UNDERSERVED 22 AREAS; AND 23 (IX) MENTAL HEALTH AND SUBSTANCE USE DISORDERS SERVICES; 24 (g) IDENTIFY THE COLLATERAL COSTS TO SOCIETY OF AT LEAST: 25 (I) THE COST OF EMERGENCY ROOM, URGENT CARE, AND INTENSIVE 26 CARE TREATMENT FOR INDIVIDUALS WHO ARE UNABLE TO AFFORD 27 PREVENTIVE OR PRIMARY CARE IN LOWER-COST SETTINGS; -8- DRAFT

9 1 (II) THE COST IN LOST TIME FROM WORK, DECREASED 2 PRODUCTIVITY, OR UNEMPLOYMENT FOR INDIVIDUALS WHO, AS A RESULT 3 OF BEING UNABLE TO AFFORD PREVENTIVE OR PRIMARY CARE, DEVELOP A 4 MORE SEVERE, URGENT, OR DISABLING CONDITION; 5 (III) THE COST OF BANKRUPTCIES CAUSED BY UNAFFORDABLE 6 MEDICAL EXPENSES, INCLUDING THE COST TO THE INDIVIDUALS WHO ARE 7 FORCED TO FILE FOR BANKRUPTCY AND THE COST TO HEALTH CARE 8 PROVIDERS THAT DO NOT GET PAID AS A RESULT; 9 (IV) THE COST FOR INDIVIDUALS WHO DO NOT FILE BANKRUPTCIES 10 BECAUSE OF MEDICAL EXPENSES AND WHO ARE FINANCIALLY DEPLETED BY 11 THESE COSTS; 12 (V) THE EFFECT ON INDIVIDUALS WHO DO NOT FILE BANKRUPTCIES 13 BECAUSE OF MEDICAL EXPENSES AND WHO ARE FINANCIALLY DEPLETED BY 14 THESE COSTS; 15 (VI) MEDICAL COSTS CAUSED BY THE DIVERSION OF FUNDS FROM 16 OTHER HEALTH DETERMINANTS, SUCH AS EDUCATION, SAFE FOOD SUPPLY, 17 OR SAFE WATER SUPPLY; AND 18 (VII) OTHER COLLATERAL COSTS AS DETERMINED BY THE TASK 19 FORCE. 20 (4) THE ANALYST SHALL MODEL AT LEAST FOUR SUFFICIENT AND 21 FAIR FUNDING SYSTEMS THAT MAY BE VIABLE FOR EACH SYSTEM STUDIED 22 PURSUANT TO THIS SECTION THAT RAISE REVENUE FROM: 23 (a) THE GENERAL FUND; 24 (b) FEDERAL WAIVERS FOR MEDICAID AND THE FEDERAL ACT, AS 25 APPROPRIATE FOR EACH SYSTEM STUDIED; 26 (c) A COMBINATION OF TWO OR MORE OF: 27 (I) PROGRESSIVE INCOME TAXES; -9- DRAFT

10 1 (II) PAYROLL TAXES THAT MAY BE SPLIT BETWEEN EMPLOYER AND 2 EMPLOYEE; AND 3 (III) OTHER TAXES, INCLUDING INCOME TAXES; CIGARETTE, 4 ALCOHOL, MARIJUANA, AND SUGARY DRINK TAXES; AND PREMIUMS BASED 5 ON INCOME Fund - creation - gifts, grants, and donations. 7 (1) (a) THERE IS HEREBY CREATED THE HEALTH CARE COST ANALYSIS 8 CASH FUND, REFERRED TO IN THIS SECTION AS THE "FUND". THE FUND 9 CONSISTS OF MONEY APPROPRIATED BY THE GENERAL ASSEMBLY TO THE 10 FUND. 11 (b) MONEY IN THE FUND IS CONTINUOUSLY APPROPRIATED TO THE 12 DEPARTMENT FOR THE PURPOSES OF THIS ARTICLE THE STATE 13 TREASURER SHALL CREDIT TO THE FUND ALL INTEREST AND INCOME 14 DERIVED FROM THE INVESTMENT AND DEPOSIT OF MONEY IN THE FUND. 15 ANY UNEXPENDED AND UNENCUMBERED MONEY REMAINING IN THE FUND 16 AT THE END OF ANY FISCAL YEAR REMAINS IN THE FUND AND MUST NOT BE 17 CREDITED OR TRANSFERRED TO THE GENERAL FUND OR ANY OTHER FUND. 18 (c) THE TASK FORCE MAY SEEK, ACCEPT, AND EXPEND GIFTS, 19 GRANTS, OR DONATIONS, INCLUDING IN-KIND DONATIONS, FROM PRIVATE 20 OR PUBLIC SOURCES FOR THE PURPOSES OF THIS ARTICLE (2) THE TASK FORCE MAY USE MONEY IN THE FUND FOR THE 22 IMPLEMENTATION OF THIS ARTICLE 46.5, INCLUDING: 23 (a) TO COMPENSATE ANY NECESSARY STAFF FOR THE 24 ADMINISTRATION OF THIS ARTICLE 46.5; 25 (b) TO PAY FOR THE ANALYST SELECTED PURSUANT TO SECTION FOR THE COSTS ASSOCIATED WITH THE DEVELOPMENT OF THE 27 METHODOLOGY AND ANALYSES CONDUCTED PURSUANT TO SECTION -10- DRAFT

11 ; DRAFT 2 (c) PAYING THE TASK FORCE MEMBERS' NECESSARY EXPENSES IN 3 PERFORMING THEIR DUTIES. 4 (3) THE APPOINTING AUTHORITIES SHALL NOT APPOINT MEMBERS 5 TO THE TASK FORCE AND THE ANALYSIS SHALL NOT BE CONDUCTED UNTIL 6 THERE IS SUFFICIENT MONEY IN THE FUND, TOGETHER WITH GIFTS, GRANTS, 7 AND DONATIONS, TO CONDUCT AND COMPLETE THE HEALTH CARE COST 8 ANALYSIS REQUIRED PURSUANT TO THIS ARTICLE SECTION 3. Safety clause. The general assembly hereby finds, 10 determines, and declares that this act is necessary for the immediate 11 preservation of the public peace, health, and safety DRAFT