House Majority Leader Amy Stephens leapt before she looked this legislative session, when she signed her name to a bipartisan bill to create a health care exchange system in Colorado. As soon as Senate Bill 200 was announced in a press conference, in which Stephens stood side-by-side with Democratic Gov. John Hickenlooper, she was bombarded with phone calls and emails from Tea Partiers and Republicans who blasted her for supporting a bill they say parallels the federal health care reform bill.
Tea Partiers immediately dubbed the bill “Amycare,” and said it would either implement an impending detested federal health care mandate or drive up costs on its own.
Business leaders, including the Colorado Springs Chamber of Commerce, have defended the measure, saying it would do the exact opposite–lower costs and help more workers throughout the state get health coverage.
Stephens, a Monument Republican, walks through SB 200 in the interview below. She explains how it would work, talks about how it’s different from the Patient Protection and Affordable Care Act, and says she has more backers than critics.
Stephens describes the loud opposition to the bill as an “echo chamber of screaming activists,” and says many who have railed against it either haven’t read the bill or don’t fully understand what it does. She admits that she didn’t expect so much political blowback, because it never occurred to her that anyone would view the bill as anything but “common sense and so easy to understand” that she didn’t bother selling the concept before introducing the bill.
That’s why she sat down with The Gazette to talk through her proposal. The measure faces one last vote in the state Senate in the coming week, and will then head to the governor for his signature. Because Wednesday is the last day of the session, SB 200 will almost certainly be signed within the next week, said Stephens.
The Gazette: What exactly is Senate Bill 200?
Stephens: Senate Bill 200 sets up a board and an oversight committee, in terms of implementing a health benefit exchange in Colorado for small business—that’s with 50 employees or less—and the individual market. Basically what this does is create a 12-member board, three of whom are ex-oficio—which would be the Division of Insurance, the Division of Health Care Policy and Finance, as well as economic business. The other nine are appointed–five from the governor, with only three from his party, he only gets three appointments out of the five from his own party—and the other four are from legislative leadership—the speaker of the House, the president of the Senate, the minority leaders. And what this board is going to be tasked to do is look at the issues surrounding the implementation of an exchange. To serve on the board, you have quite a broad width of expertise, and the bill lists the areas that, if you’re going to be considered for appointment. Also, the appointments have to be geographically sensitive, so you have to think through the state. The third thing is that the majority of people on this board have to be from the business community. The bill says, “This must ensure competition.” We’re going to look at access and affordability, we’re going to look at a pro-market exchange so we have competition and we allow different plans and different groups to get in. And there’s an oversight committee, because we want this to be transparent. We want this to be accountable, open to all Sunshine Laws. Any dollar brought in, whether it’s a gift, grant or donation, has to be subject to an audit. That’s why, in the oversight committee that we’re forming—it’s 10 members of the Legislative body—there is specific expertise, even within the Legislature. You can be from the health committee, the business committee, or the audit committee. Which is good, because they are the groups that basically hear our health and insurance issues and audit finance issues. So the oversight committee will be comprised of 10 people—five Democrats and five Republicans. We’re going to have a chair and a vice-chair. And this board is going to be asked to report to the oversight committee—all of its progress, everything its doing, do we need certain pieces of legislation. That’s what the bill does. It does no more, it does no less. You serve on the board without pay. This is not being funded. And you serve in the manner that you can call on or create advisory committees. Like, if we wanted to look at an internet portal that would need to be set up for people to shop online, you’ll have an advisory group to do so.
The Gazette: Describe Colorado’s health care problem and how this would help solve it.
Stephens: Well, we have two issues at hand. First of all, our small group market rates are going up 18 to 20 percent a year, easy. Every year, like clockwork, I get phone calls—
The Gazette: There was a guy at the SB 200 committee hearing the other day who told me that his rates had gone up 25 percent last year.
Stephens: That doesn’t surprise me. We had a huge jump, the first year I was even in the Legislature, in 2007. People are saying, “Why? What is going on? Why are my rates going up?” We could probably point to three, maybe four mandates a year on the insurance industry, for coverage. Everything from colonoscopies to mandated pregnancy benefit coverage. There’s all kinds of that. I have so many friends that own small businesses, with maybe 10 or 12 employees, and they can’t afford health premiums for their employees, and they desperately want to. I believe that an exchange offers help to employees in that area.
The Gazette: How?
Stephens: Depending on how it’s set up and created, it would allow—if you go for a more pro-market approach—it would allow an employer to give his employee premium per-month money, like a defined contribution, to let him shop online, for whatever insurance benefit or package that benefits the employee. So I could compare the Cigna plan to the Anthem plan, or the Cigna plan to the Kaiser plan, or the Kaiser plan to a small benefit plan, if that works for me. If I can have my employer contribute to that, that’s very helpful.
The Gazette: How many plans would businesses have? Would it be 12, two hundred, or what?
Stephens: In Utah, which is the model I looked at, they probably have more than 20 plans you could shop for. But most normal companies, you might get one, maybe two plans. Like, “Plan A or Plan B, what’ll you take?” I think this empowers you, as the employee, to shop for what works for you. That’s the idea of the exchange. And it’s my hope that if it’s set up competitively, in terms of allowing all kinds of different plans, and if we set up in legislation that the exchange can’t be a purchaser of insurance or a rate-setter—we already have a Division of Insurance, that does that—we’ll get creative plans that say, “Look, I’m going to jump in this thing and offer this plan.”
The Gazette: And this is optional? It’s not a mandate?
Stephens: It’s optional, yes. If someone said, “Oh, is it going to be a mandated benefit,” well, no, it’s not. In some states it was. In, for example, Massachusetts, they mandated that employers had to get in. That turned into a disaster, because employers dumped their employees, or they said, “I’ll pay the fine, but just forget it. I’m not going to do it.”
The Gazette: Do you have any cost estimate, for how much a given business would have to or could pay into the exchange?
Stephens: No, I don’t. I’m sure there could be some average numbers, and the Colorado Association of Commerce and Industry may know that answer, but I’m not familiar with average numbers, in terms of what employers and people are paying in. I don’t have that data, because people design them differently.
The Gazette: One of the most frequent criticisms of the bill has been this assertion that it is implementing federal health care reform. Is it doing that?
Stephens: We’re out ahead of the federal reform. The federal health care reform took the Republican idea of exchanges and crafted it, very visibly, around heavy mandates. In other words, the federal reform uses mandates like the Massachusetts model of defined benefits, rather than a more free-market model, like Utah’s, which was defined contribution and being able to jump in. The reason we created our legislative language more pro-market and more like Utah’s is because business pays for this stuff. There were a number of states who were taking pro-active steps to firewall their states from some of those mandates of Obamacare, and to be able to say, “No, we will do what we think is best for us.” Because right now, like it or not, O-Care is the law of the land until we get a decision from the Supreme Court. And I support (Colorado Attorney General) John Suthers in his endeavor to overturn O-Care. We should overturn it immediately, and defund it. The House, I think, voted the other day to get rid of the grants for federal exchanges. I absolutely support that. Because in the federal legislation, it says, “Look, if you don’t come up with a plan for an exchange, the feds will do it for you.” And believe me, a bureaucrat in Washington does not know what Grand Junction or San Luis Valley needs. We do. We know, here in Colorado. I get that. We get that. So as a states rights person, I’m joining other people who think that Colorado can do it a whole lot better than Washington D.C. That’s why I proceeded with this.
The Gazette: Another similar complaint from Tea Partiers has been that this bill grows government, expands government, and because it does so, it cannot be part of the solution, because at a fundamental level, government is the problem, not the solution. From that angle, how can this work from inside a government framework?
Stephens: If true health care reform—which is not what we’re dealing with right now under the current administration—if true health care reform were to actually go to consumer-driven health care reform, it would probably get rid of a lot of bureaucracies or federal intervention or state intervention. There’s no such thing as what you’re talking about. All of our health care is regulated and controlled, whether it’s state or federal. The Division of Insurance controls what Cigna or United or Anthem can charge you. And the Division of Insurance decides what product they can offer you. I argued in the Business Committee for four years for the Division of Insurance to lay off insurance people, so they could create a product. Where’s my “women-over-40 plan,” is what I’d love to know. The Division would say, “Oh, well, it’s tough.” And I’d say, “Why is it tough, Division of Insurance? Why are you making it tough, so Kaiser can’t do something like that? Because you’re controlling the market.” Right now, you and I live under every aspect of health insurance being regulated and controlled and price-determined by the Division of Insurance. They look at what the product is, and they look at what the insurers want to charge. That all comes through the Division of Insurance. So there is no such thing right now as, “Oh, this exchange is a federal intrusion.” You already have federal intrusion. You already have state intrusion. What we’re trying to do here is take action as a state, on a new idea, that if done right and competitively, will help drive down insurance premium costs on small businesses and individuals.
The Gazette: How much do you think it will drive costs down? The guy I spoke to the other day at the committee hearing, who said that his annual increase had hit 25 percent last year, he said that he thinks that his annual increase will stop, that the annual increase will be zero.
Stephens: I don’t know. It depends on how many people you get in the exchange. That’s always the case, right? The more people that enter the exchange and get involved lowers the price, because the risk pool is shared. They’re doing some modeling on that now, for Colorado, to find out how many people we think will enter the exchange. Those numbers are not available yet.
The Gazette: What about the five-year review in the bill and how the exchange system would end unless it’s renewed by the Legislature?
Stephens: Well, a lot of people said, “Well, why don’t we just sit on our hands and wait until the Supreme Court comes back with a decisions?” Well, it’s going to be a five-four vote, and it could go either way. I’m not willing to bet my freedom or my fortunes on that. I’d rather move more proactively. So the bill itself says that in five years, if we haven’t increased access, availability and affordability for people, then this thing goes away. I mean, goodbye. Unless the Legislature says, “No, this is wonderful, and we’re going to carry on.” Or, if Obamacare is declared unconstitutional, then there’s nothing stopping anyone from running a bill that says the governor must repeal certain aspects of any involvement with the feds. There’s nothing stopping that.
The Gazette: You’ve said this before, and it’s been said by some of the backers, that there’s a difference between a Colorado solution as opposed to a federal solution. What do you mean by that? What are some specific differences as far as the state goes? How would it work differently?
Stephens: Because you have to address, for instance, rural issues that in some ways California wouldn’t necessarily have to, not to the degree that we do. We have the I-25 corridor and Denver, and the I-70 corridor, and we have to look at health care issues and availability a whole lot differently than other states do. So with this board, which is going to be geographically as well as business-wise represented, it allows us to say, “Goodness, you know, what kind of products, what kind of things can we design that would allow people in (Rep.) Jerry Sonnenberg’s (R-Sterling) district or (Rep. Jon) Becker’s (R-Fort Morgan) district to be able to jump in and have help and clinics and insurance that addresses rural issues.” Would Becker and his district get more choices of plans than one or two out in the plains? He’d be like, “Well, that’s nice. Maybe you guys in Denver are going to get 20 plans to choose from, and I get two, because only two carriers and providers are out here.” The board will have to struggle with those issues. The board will actually have to have those discussions. That’s important. That’s why we, board members and someone like myself or someone on an oversight committee, has far more access to what’s going on than the feds. D.C. has absolutely no idea.
The Gazette: Why do you think there’s been such an uproar from part of the conservative community and the Tea Party?
Stephens: Let’s be clear—it’s not the conservatives. I’d say it’s more libertarians, and other people I view as anarchists, some people in the Tea Party and the 9/12 group. I think there are numerous factors. There’s not one answer.
The Gazette: I mean, you’ve been an active Republican for years. You worked for Focus on the Family—
Stephens: I represent one of the most conservative districts, and have worked for some of the most conservative—
The Gazette: But this has driven a wedge between you and a not-insignificant amount of the population around El Paso—
Stephens: No, that’s not true. In my district, I’ve had so many letters of support from small business owners who said, “Thank God.” I had a call from a very prominent businessman who said, “I sent you up there to govern, and for once, you’ve come back with some answers, more than any legislator that we’ve had serving our district. I will go to the mat for you, because you’ve gone to the mat for me.” I have more of those letters from people saying thank you than from what I call an “echo chamber of screaming activists.” And fear begets fear. I think what happened was—and this was my mistake—was that I thought this was so common sense and so easy to understand that I miscalculated the amount of communication that should have happened, not just in my district, but in other groups, before this was launched. And it was partly because the negotiations took so long, in terms of my fighting to make sure the bill included transparency and a number of other things. There should have also been education going on. I don’t harbor bad feelings about that. I understand that sometimes some people didn’t honestly read the bill. Some went, “It’s Obamacare!” Some people philosophically don’t like exchanges, and that’s fine. Everyone’s entitled to their opinion on that. You can not like exchanges, and I think there’s a body of evidence that supports exchanges. We can have an honest disagreement. But I think what’s also important to understand about this is the politics. And the politics are, A., if we don’t do something and firewall our state, then we open ourselves to the feds, and B., you also open yourself up to an executive order that this governor would do—doesn’t want to do—but would do, that wouldn’t have the firewalls, none of the protections, and none of the oversight that this bill has, which would make it much worse for Coloradans. You can’t minimize the rift that has gone on, but at the same time, you can’t inflate it. I do have to tell you, I got emails from all over the state. No one told them to write me. They just wrote. Throughout this whole six-week process.
The Gazette: What do you think the political cost is going to be to you because of this bill? There’s been talk of a primary.
Stephens: There’s always a political cost to leading and accomplishing something. I had a guy tell me about the winning-est football coach out of Alabama, and yet he had 10 percent of the detractors trying to tear him down, and say he’s this or he’s that, and yet he’s the winning-est football coach ever. And I think the same thing here. It’s been a great lesson, in terms of doing something you believe in, and doing it for the right reasons. I can live with myself. I can sleep easy at night. I’m not up at night worrying about that. If I’m primaried, I’m going to be well able to handle that. I have enough people through this experience who have said, “We will be there for you. We will help you, because you stood when others cowered. You voted when others were trying to run for their political hides.” I think the hear-me-roar is all well and good for people who want to be involved, but there’s also an echo chamber. What I learned from this is I can live with myself, for doing something I believe in. I’ve always been like that. It’s not easy. It’s not easy even when people of good conscience disagree. I’ve had good friends I disagree with on this, and good friends who support me on this. I had the please-don’t from around the state, and I had the thank-you-and-please-do from around the state, and I had more of the thank-you-and-please do from people who are sincerely looking to us to do something about these rising health care costs. Everyone, small business people, they’re sick of paying 18 to 20 percent increases per year. It’s killing them. And that’s the average Joe. That’s isn’t just some member of some big old organization. This is National Federation of Independent Business people, or your chamber people, or the guy from Popeye’s who owns three franchises, or a guy who owns a McDonald’s, who says, “Thank you. We need this.” I’m actually glad. I think we’ve done something that can potentially hold a lot of promise for them.
The Gazette: Is there a financial cost to the state, to establish the exchange system?
Stephens: The bill sets up gifts, grants and donations. We have not used state money. There’s no state money in it.
The Gazette: Do you have any gifts, grants or donations lined up already?
Stephens: That board is tasked with coming up with a business plan.
The Gazette: If the bill passes, when will would it take effect? When would an exchange actually be established?
Stephens: The governor is going to sign this pretty quick. The board has to be appointed pretty quickly, at least by July. Any kind of thoughtful appointment for a board should take some time and some research. The oversight committee has to be appointed by August.
The Gazette: How long would it take for them to actually set up the system and get the exchange system up and running?
Stephens: It will easily take a year, if not longer. They’re going to have to answer some research—how many people do we think we can get into an exchange, what kind of IT program and portal are we going to use. It’s a lot of information. A lot.
The Gazette: So when’s the earliest it would be up and running?
Stephens: By 2013, you’d have to have something semi-operational, and then it has to be operational by 2014.
The Gazette: Why by 2014?
Stephens: If the federal health care bill is declared unconstitutional, then we’ll go back and vote on whether Colorado wants to do a state-financed exchange, which I actually think is not a bad idea. Utah used its General Fund money every year, but they also charged per employee for a business to enter the exchange. So they’re pretty much self-paying. However, if the federal health care bill is declared constitutional, then there are additional requirements for exchanges to be up and running by 2014. Right now, planning is the first phase of this, and then it would be implementation. Nobody’s implementing anything right now. You’re just in discovery, is what I call it.
The Gazette: Do you plan to continue trying to educate people throughout the state about the program? Are you going to hold more town halls?
Stephens: Town halls are one thing. Any and everyone, I say, get on those advisory committees, go to the meetings, hear what’s going on. I’d be posting them on my Web site, where they’re going to be, when they’re going to be, get involved, here’s who you call, here’s who you contact, off you go. The process begins now. So people who want the transparency or oversight, be involved and get in, for whatever your motive or reason.