Democrats Reject Bill To Reimburse Insurance Fines

DENVER (AP) - Democrats made quick work Wednesday of a Republican plan to reimburse residents fined next year for not buying health insurance, rejecting the proposal 7-4.

But the bill came with first-of-its-kind analysis showing that more Coloradans without health insurance will ignore the federal mandate than get coverage and avoid penalties, undercutting a Democratic hope that most of Colorado's uninsured would get coverage either through the private market or Medicaid.

The projection is the first state prediction on how many will pay fines rather than sign up for private coverage or Medicaid. The federal health overhaul requires coverage by March 31 to avoid fines.

The legislative analysis guessed that about 254,700 adults in Colorado would pay federal fines next year for not getting coverage. That's more than the 249,000 Coloradans projected to enroll in either Medicaid or a private health insurance plan.

The projection came on a fiscal note prepared by a nonpartisan economist. Fiscal notes are routinely prepared for lawmakers to project costs for certain types of bills.

The health insurance projection on the GOP fine bill was the first to guess how many in Colorado would pay fines, which start at $95 or more this year, to be assessed next year. The fines rise to at least $695 a year by 2016.

Colorado's state-run insurance exchange, called Connect For Health Colorado, has not guessed how many would choose fines over getting private insurance or Medicaid, spokesman Ben Davis said Wednesday. The exchange had no position on the Republican fee-reimbursement idea.

Democrats hastily axed the plan in a short committee hearing.

"This is giving tax breaks to law breakers," said Rep. Jovan Melton, D-Aurora. "It would be like allowing someone to run a red light and then pay their fine on their tax return."

The sponsors of the measure insisted they simply wanted to help Coloradans who are unable to afford coverage, even with government subsidies.

"This bill will help provide some much-needed relief ... to those who are being punished for not purchasing a service they simply cannot afford," said Rep. Jared Wright, R-Grand Junction.

The analysts predicted that fine reimbursement would cost Colorado about $2 million next fiscal year and about $8.5 million by the fiscal year beginning in 2016.

Critics of the plan pointed out that many more would simply avoid buying insurance if they knew the state would pay them back for federal coverage fines.

Reimbursement would "create a perverse incentive for Coloradans to decline getting health insurance," argued Matthew Valeta of the Colorado Consumer Health Initiative.

LINKS: House Bill 1106 | Insurance Fine Projection | Connect For Health Colorado

- By Kristen Wyatt, AP Writer