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House Bill 09-1293: Tax Sick People to Create a Hospital Slush Fund

IB-2009-D (March 2009)
Author: Linda Gorman

PDF of full Issue Backgrounder
Scribd version of full Issue Backgrounder

Note: the Fiscal note numbers referenced in this bill are from the March 18, 2009 Fiscal Note. The bill language refers to the unofficial preamended version of the bill as of March 20, 2009. For the purposes of this analysis, the main difference between the preamended version and the introduced version is that the limits of the buy-in program for the disabled were increased from 400 percent of the Federal Poverty Level to 450 percent of the Federal Poverty Level.

The Bill in Brief:

  • Adds a tax of as much as 5.5 percent (the tax is called a “fee” in the bill) to every patient’s hospital bill. The potential revenue raised from the patient tax could cost Colorado’s citizens more than $573,000,000 a year in higher health care costs.
  • Attempts to evade the plain language of TABOR by calling a tax a fee.
  • Requires hospitals to mislead patients about the tax. The bill specifically prohibits hospitals from listing the tax as a line item on patient bills.
  • Significantly expands medical assistance programs without a stable funding base. In some cases, people with median household earnings or income will be eligible for Medicaid.
  • Will increase private health insurance premiums and, potentially, the Medicare cost sharing amounts paid by the elderly.
  • Reimburses hospitals for 100 percent of hospital determined costs without adequate oversight.
  • Stops general fund appropriations to hospitals from going below their 2008 levels without being “made up.”
  • Earmarks payments for an unspecified “group facilitator.”