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By Tripp Baltz
Sept. 8 — A proposed single-payer system for health care in Colorado would fulfill society's moral obligation to cover everyone, supporters say, but opponents of the proposed constitutional amendment say its $25 billion tax increase would nearly double the state's overall budget and drive employers away.
The “ColoradoCare” proposal, listed on the ballot as Amendment 69, will go before voters in November, making Colorado a battleground on the question of whether a single-payer approach is the best way to achieve universal health care coverage. If approved, Colorado would become the first state to use a taxpayer-funded system to provide health care, resembling similar single-payer systems in Canada and Europe, according to the Colorado Health Institute, a nonpartisan think tank.
“Colorado has about 360,000 people with no health insurance,” T.R. Reid, spokesman for the ColoradoCare campaign, told Bloomberg BNA Sept. 7. “This covers everybody—if you live in Colorado you're covered automatically. We have a moral obligation to care for our neighbors when they're sick.”
ColoradoCare would plunge the state over a fiscal cliff, according to Colorado Treasurer Walker Stapleton (R), co-chair with former Gov. Bill Ritter (D) of the “No on 69” campaign. “This is not the answer for fixing the health-care system,” Stapleton said. “It would wreak havoc with the state's economy.”
Current Colorado Gov. John Hickenlooper (D) also opposes ColoradoCare.
Stapleton acknowledged there is a lot of frustration with premium increases, especially in western parts of the state where unemployment is much higher and there are many uninsured. “But it's not enough to take the state down a risky road, and make us a model for what not to do,” he said.
An analysis by the CHI showed the projected annual budget of ColoradoCare would be $38 billion, with proponents saying the program could save more than $6 billion a year by 2019 while improving health care for all residents of the state.
A recent poll showed that ColoradoCare is unpopular with likely voters, Stapleton said. “We're confident it's going to be defeated, but it's important that it be defeated by a healthy enough margin that it does not come back in a future year,” he said.
Reid, a former journalist and chair of the Colorado Foundation for Universal Health Care, the statewide citizens' campaign working to pass Amendment 69, dismissed the recent poll. “I don’t buy that. It only asked voters about ‘single payer,' it didn’t talk about ColoradoCare, our proposal,” he said. A poll earlier in the summer using the term “ColoradoCare” showed the proposal winning with 55 percent support, he said.
A single-payer health coverage system is a market in which there is only one provider of insurance coverage, typically a state or national government. The idea is to provide a more efficient system by giving one big payer the market power to control costs by setting prices for drugs, medical equipment and health services, according to the CHI analysis.
If approved, ColoradoCare would amend the state constitution to create a new statewide system that would pay for covered health services for residents who don't have other forms of health coverage and supplemental care for those who do have coverage.
It could replace the current health coverage for many people, according to an analysis conducted by the Colorado Legislative Council, the research arm of the state General Assembly.
If ColoradoCare were a private company, it would rank 80th in the Fortune 500, just behind New York Life Insurance and ahead of American Express, Twenty-First Century Fox, 3M, Sears, Nike and McDonald's, the CHI analysis said.
ColoradoCare wouldn't directly employ health-care providers. They would continue to work for private practices, hospitals, clinics and other entities. The system would provide reimbursement to providers for the health services they give to patients just as health plans, Medicare, Medicaid and other programs do today.
Amendment 69 outlines the types of health care services that ColoradoCare must cover, which are the same benefits as those currently required to be provided by private health insurance under federal law. These benefits include primary and specialty care, hospitalization, prescription drugs, medical equipment, and emergency and urgent care. The program's governing structure will specify additional covered services.
A new 10-percent payroll tax—6.67 percentage points to be paid by employers and 3.33 percentage points coming from employees—would finance the system. The new taxes would be in addition to the state's existing 4.63 percent income tax. A start-up tax of 0.9 percent would be charged for up to three years before ColoradoCare would start providing benefits.
Under ColoradoCare, residents could choose to purchase private health insurance, and Medicare, military and veterans' health-care programs as well as certain other federally-operated health-care programs would continue to operate. State residents with these alternate forms of coverage would still have to pay the taxes that would fund ColoradoCare, the legislative council analysis said.
If the measure passes, ColoradoCare would administer the state's Medicaid program and the Children's Basic Health Plan, and the state and federal funds for these programs would be redirected to ColoradoCare. Under the new system, the state's health insurance exchange, created under the Affordable Care Act, would be eliminated.
The measure would also create a board of trustees which, in conjunction with state agencies, would seek federal approval to transfer administration of the Medicaid program and waive various requirements of the ACA, which allows states to develop alternative ways to pay for health care, provided certain federal standards are met. The amendment allows the board to terminate ColoradoCare if the waivers, exemptions, and agreements from the federal government aren't sufficient to make the program fiscally sound, according to the legislative council analysis.
Opponents note that the $25 billion in taxes that would be necessary to fully implement ColoradoCare nearly doubles the existing state budget of $27 billion. “The proponents admit the cost of this would be $25 billion at a minimum,” Stapleton said. “Higher taxes and an uncertain economic future could cause many companies to pull out of Colorado. There are simply too many unanswered questions” about the measure, he said.
The legislative council analysis said ColoradoCare may also cause private health insurance businesses to downsize or leave the state, leading to job losses and driving up unemployment.
Reid responded that opponents of the proposal, in focusing on the $25 billion tax, fail to note the current aggregate cost of health care in the state. “Yes, it's a $25 billion tax, that's true,” he said. “But this year Coloradans are paying $30 billion for health insurance coverage, and plans are seeking premium increases for next year of 17 percent.”
Several organizations support the measure, Reid said, including groups composed of physicians and the business community. Similar efforts are gaining ground in Oregon and Michigan, “and this idea is spreading across the country,” he said. “It's the insurance companies' own fault; they have created this problem. They are reducing benefits, narrowing networks, imposing hurdles and denying 30 percent of claims—meanwhile they are also increasing premiums. They are slitting their own throats—health insurance companies are the best argument we have.”
And while health plans are leading the opposition against the measure, health providers are also adamantly hostile to it, saying it creates significant uncertainties about reimbursement rates and about whether speciality care will be covered. The Colorado Hospital Association is strenuously opposed to it, according to Katherine Mulready, vice president of legislative policy and chief strategy officer of the association, which has 100 hospitals and health systems in the state as members.
“We perceive it as a very serious threat and will do anything it takes to defeat it,” she said. “We support universal coverage, and we know that single payer is a method of accomplishing that. But we think ColoradoCare is the wrong way to do this.”
Mulready said the structure of the governing board as defined by the amendment raises several concerns. “The board doesn't have the accountability mechanisms that a public system should have,” she said. “They are not subject to campaign finance rules or recall provisions,” she said.
Too many details about ColoradoCare will be left to this “very powerful” board of directors, Stapleton said.
“This 21-member board will be elected completely outside of the state's election statues,” he said. “They get to basically control their own election process. Meanwhile they will have incredible authority to set taxes and fees they think will be appropriate for this program.”
Reid said initially a 15-member interim board of directors would be appointed by state legislative leadership and the governor. The interim board will be responsible for establishing procedures for the election of the 21-member board that will administer ColoradoCare, he said.
ColoradoCare elections will be conducted independently of other Colorado elections in a manner to be set by the interim board of trustees, the legislative council said. Existing voter registration requirements will not apply, and the interim board will promulgate rules regarding selection of candidates, regulation of campaign contributions and spending, and the certification of election results, the council said.
“We don’t want the legislature or the governor to muck this up,” Reid said. The lack of legislative control over the 21-member board “we think of as a feature, not a bug.”
Legislative meddling is what led in part to Vermont's recent decision to back away from a single-payer financing structure for health care, Reid said. Following the initial designing of the Vermont program, lawmakers in that state “mucked it up by adding about 50 amendments to it,” he said. “That's why keeping it out of the legislature makes sense. The health insurance lobby has too much influence over state legislators.”
Vermont also has only about 620,000 residents, Reid said. “That's not a big enough risk pool,” he said. Colorado has about 5 million residents.
Health plans are also the leading financier of the chief opposition group, “ Coloradans for Coloradans,” which as of July 1 were “outspending us 5 to 1,” Reid said.
The spending gap has grown to more than 10 to 1 since then, according to Sept. 6 filings with the Colorado Secretary of State. Total contributions to the Coloradans for Coloradans effort as of Aug. 31 were about $3.9 million, compared with $311,695 for the ColoradoCare campaign. The anti-effort had spent $3.46 million by the end of August and had $443,792 remaining in its campaign chest, while the “yes” campaign had spent $311,695 by Aug. 31 and had a balance of $34,187, the filings said.
“Big money wins in American politics,” Reid said. “But the strongest force in politics is a good idea. When people know our idea, they support it. If we had the money, we'd get the idea out.”
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Full text of Amendment 69 is at http://src.bna.com/ioP.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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