DENVER — Colorado continues to operate business as usual after the U.S. Supreme Court decision Thursday upheld certain federal subsidies offered by the Affordable Care Act, and the state exchange avoided disruption that likely would have accompanied a ruling against Obamacare.
Although insurance is regulated state by state, the economic dynamics cross state lines and would have been felt in Colorado, said Dick Cauchi, who tracks health care at the Denver-based National Conference of State Legislatures.
"Colorado along with others is dodging a bullet in the sense that there's less concern, less disruption, especially for multi-state insurers that might have had their entire business model disrupted by a change in surrounding states," Cauchi said. "There may well have been some kind of adverse economics or even 'death spiral' (for the ACA) had 36 states had a different approach to the subsidy."
The King v. Burwell case challenged the subsidies offered to millions of enrollees in states that use the federal exchange, rather than a state-run model.
By interpreting the law to support those subsidies, the court's decision aids an estimated 6.4 million people who would have been unable to afford premiums in the dozens of states that declined to set up their own exchanges.
Colorado offers policies through the state-run exchange, Connect for Health Colorado. Its federal subsidies were not in question.
State Sen. Ellen Roberts, R-Durango, noted that the ruling also gives Colorado some flexibility as it addresses issues with its state exchange, whose expenses have far exceeded original estimates.
"As we try and figure out what to do with our state-run exchange, which is up but flailing — particularly financially — we now have one more option as we look at the future," she said. She noted that some states have moved from state-run exchanges to the federal exchange.
Roberts, who chairs a legislative oversight committee that meets again next month, said she isn't suggesting that's the direction Colorado should pursue. But she added that it's an alternative that merits consideration if the state exchange doesn't improve.
"We don't have a track record yet of the kind of success I think is needed," she said. "But there is a lot of effort underway to try and fix those problems."
Rep. Beth McCann, D-Denver and also a member of the oversight committee, said that while the court's ruling expands the options that Colorado can pursue — especially once states can seek waivers from provisions of the ACA in 2017 — she doesn't see the state heading toward abandoning its exchange.
"We're trying to strengthen our state exchange and make sure it can be sustainable," she said. "I think (the decision) reaffirms that we should continue to work to make sure our exchange is successful now that the challenges to the Affordable Care Act have been resolved in favor of continuing."
Cauchi, of the NCSL, said that while several states have been looking at a move to the federal exchange, there is no "absolute pattern."
"The point is, there is now flexibility for states," he said. "Whose software you're using is not a big legal question anymore. The federal regulation structure essentially encourages all the states to manage as much of the process as is agreed. There would not be a consumer consequence, there would not be an insurer consequence."
Kevin Patterson, the interim CEO for Connect for Health Colorado, said in a statement that the U.S. Supreme Court ruling doesn't affect customers here.
"If you receive tax credits to help lower the cost of health insurance purchased through us, there is still no impact on your coverage," he said.
But others noted that, at the very least, Colorado avoided potential disruption.
"Coloradans would have been insulated from the worst impacts of an adverse ruling, but we definitely would have felt ripple effects," said Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative. "By establishing our own marketplace, we made that layer of protection for consumers."
Joe Hanel, a spokesman for the Colorado Health Institute and author of a paper on the King case, said Colorado would have been spared the short-term effects of a ruling against the ACA, but long-term impacts could have been huge.
"In the insurance market, we shouldn't have been affected by that, because rates are set on conditions in Colorado, not nationally," he said. "But if you'd seen 34 states see insurance markets start to disintegrate, I'm not sure there's precedent for that.
"Now," he added, "the conversation can turn from whether we have the Affordable Care Act to making sure it does more than provide coverage. Now we're going to start talking about health care instead of health coverage."
Nevertheless, the decision reignited long-standing political differences over the ACA, with the Republicans in Colorado's congressional contingent renewing calls to dismantle the law and Democrats calling for efforts to improve it.
Republican U.S. Rep. Mike Coffman called the ACA a poorly drafted law and a disaster perpetuated by the court's ruling.
"While the Supreme Court may have given President Obama a break on bad drafting, that doesn't change the fact that we need to repeal and replace Obamacare with patient-centered reforms that lower cost and expand access," Coffman said.
Democratic Sen. Michael Bennet called on both parties to work together to make the system work better for middle-class families.
"But we cannot go back to the days when the insurance companies denied you coverage if you had a pre-existing condition," he said, "when the Medicare donut hole had seniors paying thousands more for prescription drugs, and women had to pay more for the same health coverage as men. We can't go back to those days."
Information from: The Denver Post, http://www.denverpost.com