So, should you vote for ColoradoCare?
People on both sides of the initiative weigh in on what the impacts could be.
1. It's expensive. Is it too expensive?
Amendment 69, known as ColoradoCare, would create a co-op that would cover health care for all Coloradans who are not covered by federal insurance like Medicare. An elected 21-member board would oversee funds from a 10 percent payroll tax that would generate $25 billion. Along with federal subsidies — including money that now goes to Medicaid — the system would cost $38 billion a year. That's a lot of money. But is it too much? That depends on whom you ask. First, it's worth noting that if the current system remains in place, Coloradans are projected to spend around $31.2 billion in 2019 on health care premiums and out-of-pocket costs, according to a study by Ivan J. Miller, Ph.D., for the Colorado Foundation for Universal Health Care. Under ColoradoCare the total would be $26.7 billion — a savings proponents say comes from a reduction in administrative costs, the use of bulk purchasing and a reduction in fraud.
Second, ColoradoCare would cover the 353,000 Coloradans currently uninsured, according to the 2015 Colorado Health Access Survey. If it works as advertised, ColoradoCare would also make health care more accessible the 16.4 percent of Coloradans who the Survey found are underinsured.
Proponents estimate 80 percent of Coloradans will save money under ColoradoCare. And a lot of evidence shows that single-payer systems are cheaper. But, Sean Duffy, spokesperson for the ColoradoCare opposition group Coloradans for Coloradans (which was founded by the Denver Metro Chamber of Commerce), points out that ColoradoCare isn't a single-payer system. (Federal insurance programs, many of which are operated through private companies, would still exist.) What's more, ColoradoCare isn't a nationwide system.
For a state to adopt such a system, Duffy says, is akin to "boiling the ocean" — the problem is just too big for a single state to handle. And, he adds, a lot of questions about ColoradoCare's true costs remain unanswered.
For instance, he says, "You don't know what the reimbursement for docs would be."
A ColoradoCare board would also set copayments for the system, which are undetermined, though primary and preventative care services would be free. (In cases of financial hardship, copays could also be waived.) And should the taxes collected to fund ColoradoCare fall short, the board could also ask members for a tax increase, adding to the costs.
But, says state Sen. Irene Aguilar, a medical doctor who first proposed ColoradoCare as a bill in the Legislature, cost controls are built into the system: ColoradoCare must seek and be approved for a state innovation waiver from the Affordable Care Act in order to begin offering coverage. The waiver would require ColoradoCare to provide a 10-year budget plan and show that it wouldn't add to the federal deficit. If a waiver is not granted, ColoradoCare would simply disappear.
Here's another thought: While ColoradoCare would be a member-owned co-op separate from the state government, many still consider it a government takeover of health care. However, a huge portion of Americans' health care spending is already shelled out by the government. In March, the American Journal of Public Health published a study by David U. Himmelstein, MD, and Steffie Woolhandler, MD, MPH, entitled The Current and Projected Taxpayer Shares of US Health Costs.
It found that, "[U.S.] tax-funded health expenditures totaled $1.877 trillion in 2013 and are projected to increase to $3.642 trillion in 2024. Government's share of overall health spending was 64.3% of national health expenditures in 2013 and will rise to 67.1% in 2024. Government health expenditures in the United States account for a larger share of gross domestic product (11.2% in 2013) than do total health expenditures in any other nation."
In other words, most health care expenses in the U.S. are already covered by our taxes, but because of the complexity of our system, the study found the money doesn't stretch very far. In Canada, where citizens are covered by a single-payer system, the government spends $3,074 per person on health care in a year, or 10.2 percent of the country's gross domestic product. In the U.S., the government spends $5,960 per person on health care, and still doesn't cover everyone.
2. How would private business react to the rise in taxes?
Duffy says businesses are among the most ardent opponents of ColoradoCare, along with insurers and prescription companies. Also against the proposal is a wide range of Republican and Democratic politicians, including Gov. John Hickenlooper and "all living governors" of Colorado. U.S. Sen. Michael Bennet, a Democrat, also recently came out against ColoradoCare, citing concerns about a major overhaul of the health care system and a massive new tax.
Duffy says ColoradoCare would "give us the highest state taxes in the country." And that, he says, could drive businesses from the state. Mizraim Cordero, vice president of government relations for the Denver Metro Chamber of Commerce, says businesses have two main concerns: that ColoradoCare would end up costing more money than the current system, and that it would create uncertainty. He points out that members of ColoradoCare's 21-person board would not be required to have any health care experience. What's more, the members couldn't be recalled (although they could be removed by a majority vote of the other board members), and the growth of ColoradoCare would not be controlled by the Taxpayer's Bill of Rights, as the state government is (though voters would have to approve any tax increases for the system).
"For us, it's concerning, because we're not sure what business will think when they see such high taxes in Colorado," Cordero says. "Will they continue to come to Colorado?"
Asked if there appear to be other opinions on ColoradoCare in the chamber community, Cordero says all the comments he's received so far from businesses have been in opposition and the Denver Chamber's 59-member board is unified against it.
But there is a counter-argument. Aguilar points out that many businesses already provide health insurance to their employees. On average, that costs a business 13.5 percent of its payroll costs, according to a 2015 nationwide report from the Bureau of Labor Statistics, including the medical portion of worker's compensation. Aguilar adds that many businesses also are burdened with finding an affordable health plan every year, as rates change.
"It completely gets them out of negotiating rates every year," she says. And the business costs of ColoradoCare would be lower, with employers paying a 6.67 percent payroll tax for all employees.
The self-employed, however, could face a heavier burden. While they may claim significant health care costs as tax write-offs, Aguilar acknowledges they would have to pay ColoradoCare's full 10 percent tax. That could be a heavy burden, she admits, adding that, on the other hand, knowing in advance how much to expect in health care costs could also be liberating.
Cordero is more pessimistic about the impact of ColoradoCare on start-ups: He thinks it would be devastating.
3. Would it impact Colorado's ability to attract top doctors and researchers?
April Giles, president and CEO of the Colorado Bioscience Association, thinks ColoradoCare would drown the state's growing medical-research sector.
The problem, she says, is simple: When researchers are developing new drugs and medical devices, they need to be able to shop those innovative technologies to insurers in the state. If there's just one insurer, in this case ColoradoCare, that insurer could sink a product by refusing to invest in it, or by setting a price that's too low to cover the costs. From research to commercialization, she says, it costs about $2.5 billion to develop a new drug, and about $50 to $500 million to develop a new medical device.
How big of a hit would that be? Giles says it would be twofold: First, conducting medical research in Colorado means that patients here have access to the latest treatments, often while they're still in clinical trials. Then there's the money: Medical research in Colorado has been growing at a rate of more than 10 percent a year lately, Giles says. About 28,000 Coloradans are employed in bioscience at 600 research companies. And there are about 125 more Colorado companies in the tech side of health care, called health care innovation, she says.
"We would like [medical research] to continue to be a huge economic driver in our community," Giles adds.
Notably, Children's Hospital Colorado, which includes a research component, has come out against ColoradoCare, as has the Colorado Hospital Association. Cara Welch, spokesperson for the Hospital Association, says her organization believes a pluralistic payer system would drive down costs. She says the CHA also has a lot of significant questions about how ColoradoCare would work. Since the new plan would need a waiver to absorb Medicaid (which it could only seek after voter approval of the plan), she says it's unclear what would happen to the hospital provider fee, for instance.
On the other side, Physicians for a National Health Program, which describes itself as "a non-profit research and education organization of 20,000 physicians, medical students and health professionals who support single-payer national health insurance," has come out in support of ColoradoCare.
Many issues around ColoradoCare for doctors and hospitals have to do with how much they'd get paid. ColoradoCare would allow the 21-member board to decide on reimbursements for health care providers, but Aguilar says payments to doctors would be based on 145 percent of the Medicare rate.
Aguilar sees another motivation for all the opposition. She says ColoradoCare would make the profit models that hospitals and care centers currently use less attractive. For instance, she says, in areas with one hospital and no competition, rates are often sky-high. Hospitals and other medical providers also build facilities throughout the state to increase their market share, reducing competition so rates can be set higher. But, under ColoradoCare, the same rate would be paid to everyone, which would make these strategies outdated. What's more, she says, some insurance or care models might not function at all under the new system.
But for doctors, she says, especially those in private practice, ColoradoCare should provide much-needed simplicity, allowing them to spend much less time on paperwork and more on patients.
"I have no concerns about doctors," she says. "This will be a dramatic improvement in their quality of life and their ability to deliver patient care."
4. Would ColoradoCare cover you and your family's needs?
The Centers for Disease Control and Prevention recently released the latest National Health Interview Survey, which found that for the first year in our nation's history, fewer than 1 in 10 Americans lack health insurance. The uninsured rate was at 9.1 percent in 2015 nationwide, 6 percent in Colorado.
That means most people have insurance in Colorado, and no one wants to lose their benefits. Duffy says ColoradoCare isn't clear enough about what would be covered and what wouldn't. But Aguilar says the ACA waiver needed for ColoradoCare to operate requires proving it offers "coverage that is at least as comprehensive as would be provided absent the waiver, will provide coverage and cost sharing protections that keep care at least as affordable as would be provided absent the waiver, will provide coverage to at least a comparable number of residents as would be provided coverage absent the waiver."
To take over Medicaid, ColoradoCare would have to obtain another waiver that also outlines coverage requirements. ColoradoCare also sets minimums.
Owen Perkins, spokesperson for the ColoradoCare campaign, says the plan also includes a rainy-day fund that would stow away $1.5 billion to $2 billion a year, in case of a major outbreak or natural disaster. The surplus could also be used to increase benefits or be refunded to ratepayers.
ColoradoCare could provide other benefits that the current system does not. Former Colorado Sen. Jeanne Nicholson, a nurse, notes that ColoradoCare could incentivize health care in underserved rural areas by paying higher rates or offering to cover part of the overhead. Nicholson represented a rural district that included Georgetown, Colorado. As a nurse, she made at-home visits in areas where health care is scarce and scattered — even for those who can afford to see a doctor, which certainly wasn't everyone. She says rural patients would be much more likely to get the care they need — before an expensive emergency strikes — if they have insurance and a nearby doctor.
5. What about what happened in Vermont?
In 2014, Vermont's cutting-edge plan to provide universal health care to its citizens failed. Gov. Peter Shumlin, a one-time champion of the plan, put an end to the experiment, saying simply that it was unaffordable.
To Duffy, this all sounds straightforward: If a blue state like Vermont couldn't realize the progressive dream of universal health care, what hope does a purple state like Colorado have?
Vermont, he says, shows the "experience of a passionate governor who said, 'We're going to get this done,' and then reality just hit him in the face."
But T.R. Reid, a ColoradoCare supporter, journalist and author of The Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care, among other books, says it's not fair to compare Colorado to Vermont. First, Vermont is small, meaning its insurance pool is small; comparatively, Colorado's population is eight times larger. Second, Vermont's proposal went through the state legislature, meaning a feeding frenzy of lobbyists and interest groups were free to pressure state legislators to create loopholes in the law to save them money. Third, he says, Vermont residents often travel across state lines for medical care, creating more funding problems. Finally, he says, Vermont started from the idea that it wanted a single-payer system, and then tried to figure out how to make it work.
Aguilar says she went about creating ColoradoCare the opposite way: She looked at where the money was going and asked, how could this work better?
In 2006, then-Colorado Gov. Bill Owens and the General Assembly created the Blue Ribbon Commission for Health Care Reform. Four of ColoradoCare's proponents, including Aguilar, served on the commission. Universal health care was studied by the commission and found to be possible. Still, a bill to create such coverage in 2009 failed in the Legislature, as did Aguilar's own proposal in 2010.
ColoradoCare grew out of that process. The plan was first examined by Dr. William Hsiao, a Harvard University economist, who found it viable and ready for economic analysis. That analysis was performed by Dr. Gerald Friedman, a Harvard-trained economics professor at the University of Massachusetts Amherst, for the Colorado Foundation for Universal Health Care, in April 2013. (A summary of the analysis is available at coloradocare.org).