Colorado Enacts Hospital Tax

Colorado expects to draw down $600 million in federal matching funds
April 30, 2009 -- If Oregon lawmakers are successful in imposing a hospital tax to draw down federal stimulus money, they won’t be able to pride themselves on being first. The new tax would expand the Oregon Health Plan to cover another 180,000 children and adults.

On April 21, Colorado’s governor, Bill Ritter, signed into law a hospital tax that will increase every patient’s bill by a 5.5 percent fee. The state will reimburse hospitals for any costs associated with implementing the fees.

Known as the Colorado Health Care Affordability Act, the measure is expected to raise $600 million annually which will be matched with $600 million in federal Medicaid funds. Together that money will provide health coverage to about 100,000 of the 800,000 uninsured Coloradans. On average, health insurance premiums are expected to rise by $85 annually.  
 
The bill passed the House along party lines, with 40 Democrats in favor and 23 Republicans opposed. In the Senate, all the Democrats and two Republicans supported the measure.
 
Opponents argued the bill was a tax on the uninsured. “From the hype surrounding it, you’d think Colorado has found a way to mint its own money,” said Josh Perry, Senate Minority Leader. “This is not a win-win. The bill will increase the cost of hospital stays dramatically, and it will juice the national debt by hundreds of millions of dollars to boot.”
 
Supporters lauded the legislative action. “I am proud to see Colorado lead the charge to increase access to health care for our most vulnerable citizens,” said U.S. Senator Mark Udall (D-Colo.).
 
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