CFI Report: How ColoradoCare Would Affect Health Care Cost for Latinos and Immigrants
In November 2016, Colorado voters will decide the fate of ColoradoCare, a new system of paying for health care. ColoradoCare would provide universal health coverage to all Colorado residents, regardless of immigration status, and be funded primarily through a 10 percent health care premium tax. All workers in Colorado, including immigrant workers, will pay 3.33 percent of their wages to fund ColoradoCare. Employers will pay a 6.67 percent tax on total payroll. People who report self-employment income and other forms of non-wage earnings will pay the 10 percent tax. This publicly financed, universal access system will be the first of its kind in the nation, if approved.
In this report, the Colorado Fiscal Institute compares current health care coverage and costs for Hispanic families and individuals, including Hispanic immigrants, to the proposed costs and coverage under ColoradoCare. This required calculating what Hispanic families, individuals and immigrants (both lawfully present and undocumented) currently pay in out-of-pocket costs as well as annual premiums for health insurance, and comparing to the payroll tax.
CFI’s analysis shows that for many Coloradans, paying 3.33 percent of wages will be less than they currently pay in monthly health insurance premiums and out-of-pocket costs (deductibles, copays, etc.) when they use medical services.
The savings from ColoradoCare are more pronounced for Hispanic households in Colorado, given the unique income distribution of the population. Approximately 87 percent of Hispanic households will pay less under ColoradoCare than they do today.
The answer for Hispanic families and individuals with low-cost, public health coverage, such as Medicaid, is more complex. A larger share of Hispanic families and individuals receive some form of publicly subsidized health care than do all Colorado families and individuals, 39 percent and 26 percent respectively. ColoradoCare’s premium tax will be assessed on all income and wages, including that of low-income people who qualify for public health coverage. ColoradoCare is intended to provide Medicaid and replace other forms of state subsidized health care coverage, but does not yet have a determined method for exempting, subsidizing or rebating the Health Care Premium tax to these low-income people. If ColoradoCare can rebate all or a portion of the tax as planned, then ColoradoCare would provide similar care for less. If not, some Hispanic families and individuals with public health coverage could pay more under the new structure.
The answer for Hispanic immigrant families and individuals is even more complex. Just as the current system of financing and covering Coloradans affects immigrants differently, so too will ColoradoCare. Colorado, like the nation as a whole and most states, offers a patchwork of health care services to noncitizen residents, depending upon their immigration status. For instance, immigrants who have not resided in Colorado for more than five years are ineligible for Medicaid, even if they would qualify based solely on their income. They can, however, purchase insurance through the state exchange, Connect for Health Colorado, and receive a subsidy through the Advanced Premium Tax Credit (APTC) established by the Affordable Care Act (ACA) to reduce the cost of their premiums. In contrast, Colorado immigrants without documentation are ineligible for most public health coverage. They are ineligible for Medicaid, no matter how long they have resided in Colorado, and they cannot purchase health insurance through the state exchange nor receive APTC.
As a result of this patchwork system and the limited data sources on immigrants in Colorado, determining the effect of ColoradoCare on these populations proved difficult. To overcome those challenges, CFI conducted its own survey of Latino and immigrant communities. Through Colorado Fiscal Institute 6 the Latino Health Care Access and Cost Survey, CFI gained a better understanding about how and if immigrants access the care they need and what they spend annually on health care expenditures. Our analysis, broken out as a separate section of this report, found that the universal access offered by ColoradoCare would benefit immigrants, particularly undocumented immigrants, but they could end up paying more through the premium payroll tax than they currently pay in out-of-pocket costs for the treatment they do seek.
A system of financing and access like ColoradoCare would mean that the many Latinos and immigrants with private health insurance coverage or no insurance at all would pay less under the new system. This is true even for people receiving subsidized coverage through Connect for Health Colorado. However, some families and individuals with public health insurance coverage could pay more under ColoradoCare. Finally, Colorado’s immigrant communities will be affected differently. For undocumented immigrants who call Colorado home, ColoradoCare would provide better access to health care, including preventive care, although possibly at a higher cost than our estimate of what they pay today for the care they do seek.
Read the full report here.
