Viewpoint: Single-payer health care for Colorado — the solution, or just another problem?

Denver Business Journal/July 25

Colorado voters, come November, will have the option of choosing a new health care plan to replace the status quo via the Amendment 69 ballot initiative. The “status quo” being the Affordable Care Act, or Obamacare. This was enthusiastically supported in 2010 by all of the Colorado Democratic Congressional delegation, including Colorado Sen. Bennet and Udall, and Reps. DeGette, Perlmutter, and Polis. Obamacare is now serving Colorado residents so well that it already needs to be replaced.

The replacement is called ColoradoCare, a single payer plan which according to its website, “Would finance comprehensive, high quality health care for every Coloradan.” This new plan would replace current commercial insurance plans, including employer-based insurance, Obamacare exchange plans and Medicaid.

Proponents say ColoradoCare will reduce administrative costs, arguing that Medicare spends a smaller percent of premium revenues on overhead compared to private insurance. This ignores the fact that multiple government agencies, such as the Internal Revenue Service and Social Security Administration, help administer Medicare through tax collection, premium payment, and other overhead costs. Benefits which private insurance companies must handle and pay for themselves. ColoradoCare will use the Colorado Department of Revenue for premium collection, shifting much of its administrative cost to the Colorado taxpayer.

Will this be government-run healthcare similar to what we already have through Obamacare, Medicare, Medicaid, and the VA system? Supporters say no. ColoradoCare will be administered by an initially appointed but in the future elected 21-member board. Is an elected insurance board member any different than an elected government official?

Will ColoradoCare provide free health care for Coloradans? Not quite. The nasty deductible would go away, a definite plus. And there would be no copayments for, “Designated primary care or preventative treatment services.” Big deal. Most Obamacare exchange plans already provide this. Medicaid copays are less than the price of a latte at Starbucks. But under ColoradoCare, copays would remain for specialty care and medications and are predicted to cost $1 billion a year, so Coloradans should hold on to their wallets.

Free choice of primary care providers is specified, but not so for specialist care. Narrow provider networks are problematic under Obamacare. Will ColoradoCare simply perpetuate this problem?

ColoradoCare overall will cost $35 billion, more than the current state budget of $24 billion. $25 billion of the cost will be funded through a large tax increase. Coloradans will see a 10 percent payroll “premium tax” on top of existing federal and state income taxes. Two thirds will be paid by employers, one third by employees. Those self-employed will pay the full 10 percent leaving Colorado with the highest state income tax rate in the entire country.

The $35 billion is the current estimated cost. How realistic is that cost going forward? President Lyndon Johnson promised that Medicare would cost about $500 million a year. It now costs $500 billion a year, a thousand-fold more than predicted.

What if ColoradoCare turns out to cost more than projected? How many government programs actually run on or under budget? The elected board will have the authority to raise the 10 percent tax as high as necessary to cover any financial shortfall. Another option is to ration care, placing limits on expensive medications and treatment. Many countries with a national health service follow this route. Finally, they can cut reimbursement to physicians to the point that many quit medicine or leave the state, making it even harder to find a physician. Wealthier patients can simply pay out-of-pocket for their medical care, creating a two-tiered system.

Lastly there are logistic issues. Colorado residents traveling or living out of state may need medical care. Will physicians in other states accept ColoradoCare? Or will they require payment up front, leaving the patient to seek reimbursement from Colorado? The cost of treating a heart attack or retinal detachment may exceed one’s credit card limit.

Turns out single payer was proposed in Vermont and scrapped before being implemented due to high costs and a large tax increase which would chase businesses and taxpayers out of the state. How is Colorado’s plan better than Vermont’s plan? As Albert Einstein said, “Insanity is doing the same thing over and over again expecting different results.”

Our healthcare system is costly and inefficient. Paul Ryan recently proposed a free-market approach to replace Obamacare. Thoughtful analysis is welcome, turning the system upside down is not. Each “improvement” seems to make the problem worse. If Obamacare worked as advertised, ColoradoCare wouldn’t be necessary.

What happens if ColoradoCare doesn’t work either? Ultimately the voters will make their choice in November.