DENVER — Gov. John Hickenlooper announced plans to expand Medicaid in Colorado, as states are allowed to do under the Affordable Care Act, during a press conference at the Capitol early Thursday morning.
The expansion, which will add around 160,000 poor Coloradans to the state’s Medicare rolls, won’t tap revenues in the state’s general fund and will in fact save Colorado an estimated $280 million over the next decade, according to the governor’s office.
“We worked diligently over the past several months to find savings in order to expand coverage,” Hickenlooper said. “These are the kinds of innovations that are really going to bring our Medicaid program into the 21st century.”
Those savings come from various reforms and changes: better use of technology by Medicaid-funded doctors, renewed efforts to reduce waste and a continued move toward wellness goals.
The savings itself, along with the state’s existing provider fee structure, established in 2009, will cover the cost of expansion, the governor’s office explained.
Four years ago, lawmakers expanded Medicaid coverage in Colorado but quickly realized that additional revenues drawn from the new hospital provider fee and the federal matching dollars it drew down were not enough to cover the cost of insuring an exploding population in need of care amidst the economic downturn.
Right now, about 620,000 Coloradans receive Medicaid coverage.
The Affordable Care Act, commonly referred to as “Obamacare”, mandates that all states extend Medicaid coverage to childless adults living at or below 133 percent of the federal poverty level by 2014, one of the primary ways the president’s landmark law aims to expand healthcare to an additional 50 million uninsured U.S. residents.
“Colorado has been reforming and rebuilding our Medicaid program since long before this reform directive was passed,” said Sue Birch, the executive director of the state’s Department of Health Care Policy and Financing (HCPF).
The expansion announced Thursday, which extends coverage up to 133 percent of the poverty line, would allow Coloradans earning less than $15,000 annually, or families earning under $32,000 a year, to receive Medicaid coverage.
“Simply put, healthy people cost us a lot less money and there’s evidence that having health insurance and appropriate public assistance has an enormous impact on one’s health,” Birch said.
The federal government will cover 100 percent of the costs for the newly-eligible Medicaid population through 2016. In 2017, the federal match rates begin to taper down until 2020, at which point Colorado will be responsible for 10 percent of the costs going forward.
To move forward with the Medicaid expansion, HCPF will file a State Plan Amendment with the U.S. Department of Health and Human Services. A state law change is also needed to give HCPF the spending authority for the coming changes.
Legislation for this will be introduced in the upcoming legislative session that begins next week.
Republican lawmakers signaled that they’re skeptical about the governor’s planned expansion heading into the session.
“As the Governor mentioned during his press conference today, ‘nothing is certain’ regarding federal funding,” said Rep. Cheri Gerou, R-Evergreen. “Details on how the governor plans to contain costs and cover the funding gap once federal funds diminish remain to be seen.
“No one wants to see Coloradans denied coverage, but our obligation must first be to Coloradans currently relying on state services. The Governor will need to explain how adding 160,000 people to our Medicaid system will not further reduce the monies available to support our K-12 schools and institutions of higher education.”