Obamacare Tax Prompts Republicans to Renew Calls for Audit

June 11, 2014

Patty Fontneau, Connect for Health CEO

Patty Fontneau, Connect for Health CEO

DENVER — Republicans renewed their call for an audit of the state’s Obamacare exchange after the board voted Monday to raise $13 million by imposing a tax on all health-insurance policies, even those obtained outside the program.

State Rep. Dan Nordberg (R-Colorado Springs) said Tuesday he would reactivate his push for a “broad and comprehensive performance audit” in light of the Connect for Health Colorado board’s latest decision.

“They have no problem levying a tax on hundreds of thousands of Coloradans who don’t even participate in the exchange, but can’t provide transparency on the $100 million in public funds they’ve already received,” said Nordberg. “This is an organization screaming for accountability.”

Connect for Health Colorado’s board voted 7-1 to approve the fee hike as part of its $66.4 million budget for fiscal year 2015, more than double the $26 million managers had previously discussed, according to Health News Colorado’s Katie Kerwin McCrimmon.

The fee hike comes after the board’s decision last month to give a $14,291 bonus and 2.5 percent pay raise to CHC CEO Patty Fontneau, a decision that left Republicans fuming.

Nordberg said the board’s vote “provides a real glimpse at the dysfunction of Connect for Health Colorado.”

Republican state Sen. Owen Hill (R-Colorado Springs) said the tax was an example of “government gone wild” and suggested that it may be unconstitutional, given that state taxpayers must approve tax increases.

“They’re going to continue to nickel and dime us to death when we have a hurting economy and people are struggling,” said Hill. “Now they’re trying to take another $13 million from working Colorado families because they can’t get their act together and stay on budget.”

CHC spokeswoman Linda Kanamine called the $1.25 per month per policy charge a fee, not a tax, and said it would be charged to insurance companies. In 2013, the state legislature passed a bill allowing Connect for Health Colorado to charge fees on policyholders through 2016.

“It’s up to insurers whether to absorb it or pass it along,” said Kanamine.

Fontneau said in a statement Monday that the “diverse spending approach” was needed to help the exchange become self-sustaining after federal funding dries up at the end of the year. Connect for Health Colorado has received $177 million in federal grants to fund the roll-out.

At Monday’s meeting, state insurance commissioner Marguerite Salazar said the higher fees were needed to ensure a successful state exchange.

“We’re still building this airplane,” Salazar said in Health News Colorado. “Now would not be the time to go lean. We can always do that later . . . We have a chance to make this a robust, real successful exchange.”

The only board member to vote against the budget was Ellen Daehnick, who said she had doubts that the exchange would be able to remain solvent.

“I just don’t have any faith that that we’re going to get value for our money,” Daehnick said in Health News Colorado. “It’s not clear that this organization is going to be able to pay its bills. Given that these are public dollars, those are two very big problems. Those are deal breakers.”

Nordberg’s bill to audit the exchange passed the House 60-1, but in March was killed in a Senate committee on a party-line 4-3 vote.

Fontneau had testified that the exchange had undergone “federal audits and reviews,” but documents obtained by the Colorado Observer showed that the “audit” consisted of reports created by the exchange and financial forms completed by independent auditors.

The fee hike would affect at least 875,000 Colorado policyholders, including those who receive their insurance either through their work or outside the state’s health-care exchange.

Colorado Republican strategist Jonathan Lockwood said the exchange “shouldn’t receive a single dime until an audit is performed.”

“Why would we give a desperate and struggling exchange the reward of our hard earned money?” said Lockwood. “Think of all the young people who want options and quality in health care that are being used as a cash cow too. It’s all a disappointment.”

Comments made by visitors are not representative of The Colorado Observer staff.

3 Responses to Obamacare Tax Prompts Republicans to Renew Calls for Audit

  1. Tim LeVier
    June 11, 2014 at 9:10 am

    For those who would say that it’s a “Fee”, a fee is avoidable by not participating. If I don’t want to pay car registration fees, I can choose not to have a car.

    Because healthcare insurance is now mandatory, this is no longer a fee. It’s a tax.

  2. Pud
    June 11, 2014 at 3:48 pm

    Healthcare IS a tax, so another tax on a tax? And the news media – Channel 9, 7, 4 and Fox, along the newspaper don’t report this? Nice.


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