Surge likely in health plans

500,000 could look to Medicaid after widespread job losses

More than 500,000 Coloradans are expected to join government health insurance plans, namely Medicaid, by the end of the year as they lose coverage typically offered by their employers because of the global coronavirus pandemic.

The projection by state officials is unprecedented — when Colorado expanded Medicaid almost a decade ago, 400,000 people enrolled within a two-year period — and underscores the vast economic fallout from a public health crisis that has left hundreds of thousands of residents without jobs or with reduced hours.

“We have a lot of Coloradan families that are hurting,” said Kim Bimestefer, executive director of state Department of Health Care Policy and Financing, during a press briefing.

“This downturn is unlike anything we have seen,” she added.

The large surge in Medicaid enrollees will place further financial pressure on Colorado’s hospitals — which are struggling with a decline in nonemergency procedures as their staffs respond to one of the most severe pandemics in recent memory.

The additional enrollees will cost the state $47 million in gener

al funds, said John Bartholomew, chief financial officer for the Department of Health Care Policy and Financing.

Social distancing policies implemented by state officials in March have shown signs of slowing the spread of the new coronavirus as new cases and hospitalizations remain relatively low.

However, they have carried a heavy economic price as businesses have closed — some permanently — and employers have laid off workers or cut their hours.

Colorado’s unemployment rate has soared to 11.3% — the highest level since the state began tracking in 1976 — as more than 320,000 jobs were lost in April.

Businesses, restaurants and parks are reopening, but this week, economists declared the U.S. economy to once again be in a recession as employment fell sharply after peaking in February.

The expected surge in enrollment in Colorado’s Medicaid and Child Health Plan Plus programs reflects a 40% increase from the 1.3 million Coloradans on the plans as of March 2020, according to a news release.

Colorado expanded Medicaid — the government health care program for low-income individuals — to more people under the Affordable Care Act, also known as Obamacare.

The Department of Health Care Policy and Financing is prohibited from unenrolling members from Medicaid during the public health emergency. The agency expects that once the emergency period ends, more than 300,000 people will not be eligible for coverage, according to the news release.

The increase in Medicaid enrollees alone is predicted to cut hospital revenue by $500 million in the next year, according to a report by the Colorado Health Institute.

“The fear would be that any financial pressure on hospitals could have access implications for patients, particularly in a rural area,” said Spencer Budd, the analyst who wrote the report.

When someone moves from private or employerbased health insurance to coverage under Medicaid, they might have to find a new doctor if their previous provider is not in-network. The expected revenue decrease also has the potential of putting hospitals, especially those in rural areas, at risk of closing their doors.

The hospital revenue will decline with the surge in enrollees because Medicaid spends about 77 cents per dollar on what it costs to provide care, said Katherine Mulready, senior vice president and chief strategy officer with the Colorado Hospital

Association.

“Collectively those hits are likely to mean potentially layoffs, potentially service line cuts, longer waiting times for patients,” Mulready said. “The reality of it is we don’t exactly know right now and it might vary.”