What’s at stake?
-- Our most vulnerable citizens & Medicaid

Thousands of Montana’s most vulnerable citizens rely on Medicaid health programs – from senior citizens to people with mental and physical disablities. State budget restrictions such as CI-97 (SOS) and Colorado’s TABOR weaken and limit Medicaid.

Lessons from Colorado
Colorado’s version of CI-97 hindered the state's ability to provide health coverage through Medicaid and related health care programs.

Unlike education and public health, Medicaid has not experienced large funding declines in dollar terms under TABOR.

Nevertheless, Colorado (like other states) faces critical health-care challenges posed by the steady erosion of employer-sponsored health coverage and rising health-care costs.

Unlike other states, Colorado must also contend with TABOR, which has left it without the necessary resources to meet these challenges.

Between 1992 and 2004 the share of low-income children lacking health insurance doubled in Colorado (from 16 percent to 32 percent) even as it fell in the nation as a whole (from 21 percent to 18 percent). Colorado now ranks last among the 50 states on this measure.

In Colorado, the percentage of low-income adults under 65 without health insurance rose from 31 percent in 1992 to 46 percent in 2004, dropping its ranking from 20th to 48th.

In 2002, Colorado ranked 49th in the nation in both the percentage of low-income adults under 65 and the percentage of low-income children covered by Medicaidⁱ. This indicates that in Colorado Medicaid is not fully performing the function for which it was designed.

Consequently, low-income adults and children are much more likely to be uninsured in Colorado than in the nation as a whole (Table 2).ⁱⁱ

Simply put, Colorado's Medicaid program remains one of the most limited in the country. "For the most part, the Colorado Medicaid program is a 'bare bone' program providing mainly the federally required services for federally required populations," the Colorado Joint Budget Committee staff noted recently.ⁱⁱⁱ For example:

In Colorado, a working family of three is ineligible for Medicaid if its income exceeds $6,132, which is just 39 percent of the poverty line. Only seven other states have stricter income eligibility standards.^iv

Colorado is one of only 15 states that does not have a "medically needy" Medicaid option, which provides coverage to people whose gross income modestly exceeds Medicaid limits but who have high medical bills that reduce their disposable income below Medicaid limits.^v

Colorado is one of only six states that impose an asset test on children applying for Medicaid. In Colorado, children whose families have more than $2,500 in assets are ineligible for Medicaid, no matter how low the family's income is.^vi

Colorado's separate health program for low-income children, known as CHP+, is one of the most restrictive of any of the state programs established under the State Children’s Health Insurance Program (SCHIP). Colorado is one of only six states that limit its children's health program to families with incomes of 185 percent of the poverty line or lower.^vii (SCHIP provides states with federal matching funds to cover children whose families earn too much to be eligible for Medicaid but not enough to afford private insurance. Most parents in such families are not offered health insurance on their jobs or if they are, they cannot afford the premiums for family coverage.)

TABOR weakens and limits Medicaid
Experts agree that TABOR is a key reason why Colorado could not adequately address its problems of below-average Medicaid coverage and above-average percentages of uninsured residents.

"Improving access to affordable insurance is a particularly difficult problem in Colorado because of limitations on increasing state spending by virtue of the TABOR Amendment. . . . Even though Colorado was eligible to receive up to $42 million in federal matching funds in 1998, we could produce only $7 million in state funds and ended up with a small fraction of what could have been ours." -- Dr. Gary VanderArk, "Rx for the Uninsured: Casting a safety net for the indigent." The Denver Post, February 28, 1999, p. J1.

"[The reason the state did not provide Medicaid coverage to more children] was absolutely not the recession, because at the same time, we were giving money back to the taxpayers -- $100, $200, $300. In return for that, we had 190,000 uninsured children, half of whom would potentially be eligible for Medicaid or the child health plan, yet we weren't able to get these kids health insurance because we didn't have the budget flexibility under TABOR." -- Dr. Stephen Berman, Interview, June 2005.

"[B]udgetary constraints such as those resulting from the Taxpayers Bill of Rights Amendment (TABOR), combined with increasing medical costs, make the further erosion of government program reimbursements [to health-care providers] a stark reality. Such erosion will only serve to further perpetuate the escalation of uncompensated care, insurance premiums and, ultimately, the ranks of those unable to afford private coverage." -- Denver Metro Chamber of Commerce, "Medicaid, the Uninsured and the Impact on Your Business," 2001, www.denverchamber.org/chamber/paffairs/Whitepaper.pdf.

ⁱ The Kaiser Commission on Medicaid and the Uninsured, "Health Insurance Coverage in America: 2002 Data Update," December 2003, www.kff.org/uninsured/4154.cfm.

ⁱⁱ While the statistics quoted in the paper are from 2002, this is not a new trend. In two earlier periods (1997-1999 and 1999-2000), Colorado ranked 49th in Medicaid coverage of low income adults under 65 and either 48th or 49th in Medicaid coverage of low income children. In addition, the uninsured rates of both of these groups of low income Americans were higher in Colorado than in the US as a whole during these time periods.

ⁱⁱⁱ Colorado Joint Budget Committee, "Department of Health Care Policy and Financing, Fiscal Year 2005-06 Staff Budget Briefing," December 15, 2004, www.state.co.us/gov_dir/leg_dir/jbc/hcpbrf.pdf.

^iv Kaiser Commission on Medicaid and the Uninsured, "Beneath the Surface: Barriers Threaten to Slow Progress on Expanding Health Coverage of Children and Families," October 2004, www.kff.org/medicaid/7191.cfm.

^v Martha King, "The Public Side of Health Care Focus on Medicaid & SCHIP," Presentation given at National Conference of State Legislatures (NCSL) meeting, November 25, 2002.

^vi Colorado Health Initiative. "Medicaid Fact Sheet," www.cohealthinitiative.org/MEDICAIDfactsheet.htm. In FY 2006, the asset test will be eliminated due to increased revenues resulting from an increase in the tobacco tax.

^vii Kaiser Commission on Medicaid and the Uninsured, "Beneath the Surface: Barriers Threaten to Slow Progress on Expanding Health Coverage of Children and Families," October 2004, www.kff.org/medicaid/7191.cfm.

Source: A Formula for Decline, Lessons from Colorado for States considering TABOR, David Bradley and Karen Lyons, Center on Budget and Policy Priorities, October 19, 2005

What's At Stake:

Senior citizens

Public health and safety

Local communities

Jobs and economic development

K-12 schools

Higher education

Montana's most vulnerable citizens

Agriculture