A look at Colorado’s health care budget priorities

Earlier this year, Gov. Jared Polis listed a series of budget priorities for the state. Lowering health care costs, expanding public education, and creating additional public health and environmental health protections are some of the governor’s top priorities. His “roadmap to lower health care costs” detailed several specific goals.

 

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Many of these goals were reflected in the 2019 Long Bill, which establishes the guidelines and funding mechanisms for the state and determines the line items for the balanced budget for the upcoming fiscal year.

“This budget lays a strong foundation for a bold vision for our state, creating opportunity for all, Gov. Polis said in a press release. “A product of collaboration and teamwork with Colorado’s leaders in the General Assembly, this budget ensures that our state’s economic success can be realized by every child, adult, and business in our communities.”

In an effort to reduce health care costs, the governor established the Office of Saving People Money on Healthcare. The  governor established the office via executive order, and its goal is to determine the root causes of high health care costs.

The 2019 Long Bill, SB19-207, makes a series of health care-related funding adjustments that seek to redirect money within the Department of Healthcare Policy and Financing and the Department of Public Health and Human Services. Some of the fundamental funding restructuring maneuvers and key policy objectives are detailed below:

Key Policy Objectives

Increase funding to respond to the opioid epidemic: The state allocated an increase of $10 million for the state’s response to the opioid epidemic. The money is being reallocated from marijuana tax revenue to address the issue and find potential solutions to the growing rate of opioid overdoses and deaths in the state (pages 77 and 155 of the Long Bill).

Mental Health and Suicide Prevention Funding: The budget allocates an additional $500,000 for mental health and suicide-prevention policies that are currently in place. The increase in funding is an attempt to expand access to care (pages 155-157 of the Long Bill).

Additional funding for family planning services in public health clinics: The budget allocates a little over $1 million in additional funding for the expansion of family planning services under the Department of Public Health and Environment (page 155 of the Long Bill).  

Funding Reallocations to Existing Departments

Individual programs within the Department of Public Health and Environment are allocated funding based on current figures determined during previous budget cycles. New legislation passed during the legislative session is also considered in this formula. An overarching goal of the department was to expand access to various health services, which is reflected in the examples below(summarized in the Long Bill pages 12-17):

Major Funding Changes

• Behavioral Health: An increase of $23.5 million total funds, including $4.1 million General Fund, for the capitation and fee-for-service Medicaid behavioral health programs  
• Children’s Basic Health Plan: An increase of $3 million total funds for children and pregnant women enrolled in the Children’s Basic Health Plan
• Medical Services Premiums: A net decrease of $48.3 million total funds, including an increase of $23.4 million General Fund, for medical services and long-term services and supports provided through Medicaid
• Office of Community Living: A net decrease of $30.3 million in total funding, including a decrease of $15.6 General Fund, for home- and community-based services for people with intellectual and developmental disabilities  
• Medicare Modernization Act: A decrease of $183,279 General Fund in reimbursements to the federal government for prescription drugs for people eligible for both Medicaid and Medicare

Targeted Medicaid Rate Adjustments:

There were also a series of targeted rate adjustments to Medicaid rates (page 49 of the Long Bill):

• Home- and Community-Based Services (HCBS): An increase of $10.2 million total funds, including $5.1 million General Fund, to increase select HCBS waiver services with large gaps between current rates and expected costs
• Behavioral Health Capitation: An increase of $8.6 million total funds, including $2.4 million General Fund, to increase base rates for community mental health centers and other mental health and substance use disorder providers. This increase is based on applying a 2 percent increase to providers’ employee compensation expenses
• Maternity Services: An increase of $4.4 million total funds, including $2 million General Fund, to increase maternity rates to 80 percent of the benchmark   
• Laboratory/Pathology: A decrease of $9.3 million total funds, including $3.5 million General Fund, to rebalance laboratory and pathology rates below 80 percent and above 100 percent of benchmark Medicare rates
• Anesthesia: A decrease of $3.1 million total funds, including $925,095 General Fund, to reduce anesthesia rates to 120 percent of the benchmark Medicare rates
• Diabetes Test Strips: A decrease of $2.3 million total funds, including $873,026 General Fund, to reduce prices for diabetes test strips

Changes to Eligibility and Benefits Requirements:

The Long Bill also made a series of changes to eligibility and benefits requirements. This includes an increase of $24 million total funds for these changes (pages 50-51 of the Long Bill):

• Services for individuals with Intellectual and Developmental Disabilities (IDD): An increase of $13.9 million total funds, including $2.8 million General Fund, for services for people with intellectual and developmental disabilities (IDD) to: eliminate the current waitlist for the State-only Supported Living Services Program; enroll 272 waitlist members onto the Family Support Services Program; and enroll 150 people onto the adult comprehensive services waiver  
• Adult dental annual cap: An increase of $11.1 million total funds to raise the annual cap on adult dental services from $1,000 to $1,500.
• Senior dental program: An increase of $1 million General Fund to increase services provided through the senior dental program.
• Benefits and Technology Advisory Committee: An increase of $314,696 total funds, including $114,702 General Fund, and 1.8 FTE to create a standing benefits and technology advisory committee to evaluate new evidence-based research to inform decisions about the amount, scope, and duration of benefits