Government Health|June 28, 2012 12:51 PM

Supreme Court decision means 480,000 more Coloradans to be insured

Citizens will see free care, subsidies and penalties

Supreme Court Chief Justice John Roberts surprised many by upholding the mandate to buy health insurance, saying it was a legal tax.

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Updated 2:35 p.m.

In Colorado, the decision to uphold the health care law is expected to mean nearly half a million uninsured Coloradans will gain coverage beginning in January 2014.

It also means Republicans are pulling the issue to center stage in the November elections, where Colorado will be a key battleground state. Immediately after the ruling was announced, several Republican lawmakers urged repeal of the entire law.

Reaction from Colorado officials ranged from “dangerous” to “wonderful” – depending on whether the speaker was Republican House Majority Leader Amy Stephens or Democratic state Sen. Irene Aguilar, who is the only licensed physician in the legislature.

The court’s 5-4 decision, surprisingly led by the conservative Chief Justice John Roberts, let stand both popular and controversial sections of the health care law.

The court’s ruling means:

  • Of Colorado’s 5.1 million residents, about 150,000 people on the lower end of the income range will qualify for free health care through Medicaid, according to an estimate for 2016 from Jonathan Gruber, a Massachusetts Institute of Technology analyst and supporter of the mandate. For example, a single person would have to earn only $1,117 in a year to get Medicaid today; the law will change that to $14,856 or less. Families of four with incomes of up to $30,657 also will get free insurance through Medicaid beginning in 2014. These are all 2012 figures that may rise by 2014.
  • Another 330,000 Coloradans will start buying their own insurance, with the help of subsidies or under pressure from mandate penalties, Gruber estimated in that report for the Colorado health insurance exchange. To see examples and calculate your own subsidy or penalty, see mandate story.
  • About two-thirds of Coloradans with individual insurance are projected to receive subsidies, ranging into the thousands of dollars a year.
  • About 320,000 to 370,000 Coloradans may be left without health insurance, if Gruber’s estimates are correct. This includes people who choose to pay the penalty, fall through the cracks in the legislation, object on religious grounds, or are not here legally.
  • Experts have been having trouble estimating how many Coloradans would be subject to the penalty, which the court decided was a constitutionally legal tax. In addition, it’s impossible for economists to know how many people will choose to pay the relatively low penalty, rather than buy expensive health insurance.
  • For most people with employer-provided health insurance, little changes directly, according to expert Dr. Mark Earnest of the University of Colorado School of Medicine. “People that are covered right now will not notice a big difference,” he said. But Congressman Scott Tipton, representing southern and western Colorado, projects the decision “may result in 20 million Americans losing their employer-based coverage.”

Numerous Republicans insisted the court set a terrible precedent. “The Court has endorsed Congress’s unprecedented decision to mandate that individual Americans buy a particular product or service or pay an economic sanction,” said Colorado Attorney General John Suthers, who joined with other states’ attorneys general as a plaintiff in the case.

Some experts are arguing that the Court’s decision was nuanced and put some limits on that. Republicans also say the decision will cut jobs, while Democrats say it will increase them.

Republican Stephens said: “Federally mandated health care oversteps congressional authority and will hamstring entrepreneurship and impose impossible-to-manage costs for all employers here in Colorado and across the country.”

But many Democrats said the ruling means thousands of Coloradans will now have access to healthcare. And, they urged their colleagues on the other side of the aisle to work with them to implement the law.

“We have already seen the positive impacts of the law, including keeping prescription drugs affordable for our nation’s seniors and prohibiting insurance companies from denying health insurance to children with pre-existing conditions,” said Democratic U.S. Sen. Mark Udall.

Some small businesses are eligible for tax credits for health insurance under a fairly complex set of limitations under the law. Click here to calculate if your business qualifies for the tax credit.

A major question remains cutting the cost of healthcare, as continuing escalation could price everyone out of insurance. The U.S. now pays twice as much as European countries to cover fewer people, and to produce poorer overall health.

Earnest said the health care law includes a number of incentives that should lower costs, increase access and improve quality.

But many of the provisions need more time to show if they are effective.

And even some supporters of the law would like to add more cost-containment efforts.

The court’s decision also means that it is not upending $200 million in grants and payments to various entities in Colorado since the law took effect two years ago, according to the Colorado Hospital Association. That could have been a nightmare to unravel.

Upholding the law also means continuing the requirement that insurance companies regulated by the federal government spend at least 80 percent of individual clients’ premiums on their health care. That means 20 percent or less on administration and profit. For health plans serving large employers, that’s cut to 15 percent.

In Colorado this summer, insurance companies are sending out $27.5 million in refunds for failing that test and keeping too much for themselves. The average rebate for 121,000 Colorado families is $227 this year, but some of that will go to employers who pay for insurance.



  • More people will have to pay the piper under this huge healthcare deal. Those who have been immune from taxes will have a very rude awakening. Small employers will choose to stay small and big companies like Motorola will chose the lesser of the costs and dump their employee healthcare benefit like a hot potato. It’s a program that is so convoluted that only a liberal can like it.

  • Ann: in your second-to-last paragraph, last sentence, you state “For employer health plans, that’s cut to 15 percent.” That’s not quite accurate.

    The Medical Loss Ratio for individual and small group employers is 80 percent, that is, 80 percent goes to health care and enhancements, and 20 percent for administrative costs. For large group employers (generally, 50 employees or more), it’s 85/15.

    Marianne Goodland, PIO
    Colorado Division of Insurance

    PS – the contact page doesn’t appear to be working.

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