Gov. Jared Polis’ budget proposal takes aim at Medicaid spending, eyes Pinnacol spin-off — again

In the last budget that Gov Jared Polis will usher through from conception to enactment the term-limited Democrat hopes to wrestle down ever-rising Medicaid costs he declared Friday in unveiling his proposal It s a plan that proposes clamping down on dental benefits requiring prior authorization for more services and making payment changes affecting home fitness services Elsewhere Polis hopes to revive his often-proposed and never accepted by the legislature idea of privatizing Pinnacol Assurance the state s workers compensation insurance initiative to generate hundreds of millions of dollars Medicaid which provides robustness insurance to low-income Coloradans has been gobbling an ever-bigger chunk of the overall state budget for years It s growing at a rate that s double the overall spending progress allowed by the Taxpayer s Bill of Rights or TABOR If left unchecked Medicaid costs could end up dwarfing all other spending in the state in the next years leaving almost no money for any services that aren t directly related to coaching or robustness care according to the governor s office This gets worse if we don t fix it Polis noted Friday The governor s overall budget proposal for the - fiscal year includes a total spending request of more than billion up from billion in the current fiscal year which goes through June The bulk of that is already spoken for as pass-through spending or other obligations The general fund which covers greater part day-to-day spending would grow from about billion to billion under Polis proposal Polis announcement of his proposal represents a starting point for the state s next spending plan which will cover July through June He will unveil an amended proposal in January as the state updates economic projections Then the legislature will have its say starting with the powerful Joint Budget Committee Four of the committee s six members are seeking higher office in the electoral contest making this budget an even more pitched-than-usual declaration of political values The legislature will vote on the final budget in the spring Early forecasts have the body needing to make up a nearly billion gap again between planned spending and what the state is allowed to spend under the rise cap set by TABOR This tight budget year follows an August special session where lawmakers needed to fill a million hole opened up in the current fiscal year by federal tax changes signed into law by President Donald Trump over the summer Trying to rein in Medicaid Polis declared a key hope of his budget proposal is to bring enhancement in Medicaid spending in line with the overall increase in state spending allowed by TABOR Over the past decade the state constitution has limited total state spending to enhancement by an average per year Medicaid spending has grown at double that rate In that period general fund spending on Medicaid has grown from about billion billion per year In his proposal Polis would increase state Medicaid spending by about million That increase alone represents more spending than several executive agencies combined budgets but would still be half as steep as Medicaid s projected advance without changes to the plan A Medicaid sign is displayed in the hallway at Clinica Family Medical on Thursday May in Adams County Colorado Photo by Eli Imadali Special to The Denver Post Polis stated he wants to lower overall spending on Medicaid services without touching how much individual providers are paid for services Proposed changes include annual caps of on dental benefits which Polis noted would be double the cap that existed in adding prior authorization to a few services and changing how payment is calculated for home strength nursing and therapy services Several of those proposals are extensions of executive orders he issued to help shore up the bulk contemporary budget trouble in August There have been a number of benefits that have been added to Medicaid in latest years and certain of those are not sustainable over time Polis noted His administration has also been working with national consultants to examine how Colorado s Medicaid spending has differed from national trends That summary should be available in the New Year Pushing to privatize Pinnacol again In another key element of his proposal Polis is looking to restart a fight from last year over converting the state s quasi-governmental workers compensation insurance initiative to a fully private enterprise Polis office predicted the Pinnacol Assurance spin-off if completed would generate at least million for the state About half of that would go to pay for the homestead property tax exemption while the rest would go to state maintenance and to balance the budget Pinnacol acts as an insurer of last resort for employers in high-risk industries The firm is generally not allowed to refuse to insure employers or cancel policies but it can operate only within Colorado s borders Polis restarted the conversation last year with arguments that Pinnacol was hamstrung from competing in at present s markets where employers are less bound by state borders than ever Turning the quasi-state agency into a private firm would also equal a payday for a cash-strapped state The effort petered out when the idea didn t win much traction during the legislative session though Polis hinted later that he hadn t given up on the effort This year Polis declared the money would help the state keep its property tax break for certain long-term homeowners known as the homestead exemption The tax break is usually paid for using the state s TABOR surplus but the state won t have one this year Polis disclosed Nearly every other state has moved in this direction for reasons that are very crucial to employees and employers Polis commented For Pinnacol to be able to continue to serve as our insurer of last resort we have to be able to allow them to write interstate business to take a few of the same measures that can reduce overhead and produce better value to employees that other states have done Related Articles Coloradans scramble for help as SNAP suspension looms and food banks just don t have enough Older Coloradans and rural residents face bigger wellbeing insurance price hikes Metro Denver ballots include housing measures tax questions and charter changes plus a little sex appeal ICE s arrest of father children in Durango sparks CBI review local backlash ICE s arrest of father two children in Durango spark local protests Opponents to the move worry that taking Pinnacol private would weaken protections for workers and employers in the state The insurer essentially acts as a social safety net for industries that otherwise couldn t obtain coverage they argued last year This year opponents are warning that privatizing the insurer and taking a portion of the money potentially hundreds of millions of dollars would be unconstitutional because the money isn t the state s to take Pinnacol s assets were built from employer premiums not tax dollars noted Stephanie Tucker an attorney and president of the Workers Compensation Teaching Association in a comment These funds belong to the employers who paid premiums and to injured workers not the state Privatization without clear legal authority could effect in years of litigation and uncertainty for both Pinnacol and the state of Colorado State officers have a different interpretation The state has an obligation to get value for Pinnacol if it s spun off Mark Ferrandino the head of the Office of State Planning and Budgeting revealed Polis commented he s been briefed on the legal question and his staff classified it as a very low litigation danger Stay up-to-date with Colorado Politics by signing up for our weekly newsletter The Spot