Lawmakers question future of health exchange

By Katie Kerwin McCrimmon

Colorado lawmakers grilled managers for the state health exchange Wednesday, but did not embrace or oppose specific fee hikes.

Sen. Ellen Roberts, R-Durango, grilled health exchange managers and board members. She said she hasn't decided yet whether Colorado's exchange is sustainable.

Sen. Ellen Roberts, R-Durango, grilled health exchange managers and board members. She said she hasn’t decided yet whether Colorado’s exchange is sustainable.

Managers at Connect for Health Colorado earlier this week recommended hiking the user fees from 1.4 percent to as high as 4.5 percent to fund about $54 million a year in expenses, a huge jump from long-promised costs of $26 million a year.

At the same time, exchange managers also are pushing for a separate hike in assessments on all health insurance customers in the state — even those who buy insurance outside the state exchange.

Board members for the exchange are scheduled to vote on the proposed fee and assessment hikes on Thursday afternoon.

Sen. Ellen Roberts, R-Durango, who heads the legislative oversight board, said she has not decided yet whether it’s worth saving the state’s troubled health exchange.

“There’s been some chatter. Are we really trying to help you or trying to sink you? We don’t know yet,” said Roberts.

She questioned whether a part-time, volunteer board is capable of properly setting up and monitoring Colorado’s health exchange.

“Was the structure correct? Are you capable?” Roberts asked the board members and managers who withstood five hours of questioning in an ornate Capitol hearing room Wednesday.

“This was supposed to be a gateway to better health care, and in some ways, it has created more of a bottleneck,” Roberts said.

Other lawmakers wanted to consider severing the state exchange completely from the state Medicaid system since a troubled computer system linking the two entities has caused major headaches for customers. And they decried what they see as overly high salaries at the exchange and a “revolving door” that has left the exchange short-staffed while outgoing executives have left for lucrative jobs in the health care industry.

Roberts said she is opposed to what’s know as the “broad market assessment,” which hits health insurance customers with charges of $1.20 per member per month to run the exchange. Exchange managers want to hike that fee to $1.80 per member per month through the end of 2016.

“I’ve always been troubled by assessing a fee against people who do not buy a product on the exchange,” Roberts said.

Incoming interim CEO Kevin Patterson, left, with board members, Sharon O'Hara and Steve ErkenBrack, testified before the Colorado legislative oversight committee on Wednesday.

Incoming interim CEO Kevin Patterson, left, with board members, Sharon O’Hara, Steve ErkenBrack and Adela Flores-Brennan, testified before the Colorado legislative oversight committee on Wednesday. Lawmakers questioned whether a volunteer part-time board was capable of overseeing the health exchange.

She noted that the exchange has been attracting significant numbers of people who end up qualifying for Medicaid, while it has struggled to attract enough people to buy private insurance to make it financially self-sustaining.

“Those people who didn’t benefit (from the exchange) are now shouldering a burden in two ways: as taxpayers subsidizing Medicaid and the exchange when they’re not using it either,” Roberts said. “We are making regular folks of all types pay for something they are getting no value out of personally.”

Rep. Dianne Primavera, D-Broomfield, said she’s disturbed that fees on consumers may go up dramatically when for-profit health insurance companies are having record-breaking profits and rewarding CEOs with millions in compensation.

“I don’t know why they have to be passed along to the consumer,” Primavera said. “We should have the (health insurance) CEOs take a hit.”

Rep. Su Ryden, D-Aurora, echoed Primavera’s concerns.

“We are providing a really, really lucrative marketplace for the (health insurance) industry,” Ryden said.

She and other lawmakers wanted to consider possible legislation to help drive down health care costs.

Under Roberts’ leadership, the legislative oversight board has taken a much more aggressive stance and will be meeting regularly throughout the summer to closely watch what’s happening at the exchange.

During Wednesday’s hearing, both the outgoing interim CEO Gary Drews and the incoming interim head Kevin Patterson spoke to lawmakers. They took unending criticism from lawmakers on both the right and the left.

Roberts decried the decision by the exchange board to so richly reward its executives while public service jobs are not supposed to be highly paid. She also pointed out that the exchange is paying its CEO about $200,000 a year or twice as much as the governor’s $90,000-a-year salary.

“We are creating too rich of an organization for (something) that some people never thought they needed in the first place,” Roberts said.

Board member Steve ErkenBrack, who heads the nonprofit insurance company Rocky Mountain Health Plans, defended the high salary level for the exchange CEO saying it’s comparable to the pay in the private sector for “an organization that has this amount of dollars going through it.”

He acknowledged that the “C-suite flight” has been a problem. After the first open enrollment last year, the CEO, chief financial officer and chief operating officer all left the exchange.

Drews, the outgoing interim CEO, worked to keep the organization afloat over the last eight months while the search for his permanent replacement failed. Patterson, a former board member and top aide to Gov. John Hickenlooper, then offered to ride in to the rescue.

He acknowledged on Wednesday that some friends are questioning his mental state for taking on a job that could be tantamount to career suicide. But Patterson said he thinks the exchange can survive if he gets the right people in place and they carefully prioritize fixes.

First on Patterson’s to-do list will be bringing in a new chief financial officer. He hopes to hire that person within days. Then, he said he’ll turn to beefing up the exchange’s IT management team so that customers will have a much better experience when it comes time to buy health insurance again starting on Nov. 1.

ErkenBrack said the board will consider hiring a permanent CEO after July, when as many as five board members could transition off the board.

In order to stabilize the exchange, ErkenBrack said it’s critical to move from a “transitional mode to a permanent mode.”


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