Universal health care: Has the time come?

Coloradoans consider Amendment 69

Four years after Colorado citizens voted to legalize recreational marijuana use, a committee to provide single-payer health care has put the state back at the forefront of a national debate, this time on health-care reform.

Under the Affordable Care Act, or Obamacare, the state can opt out of the federal program if it obtains approval of a waiver to replace it with a Colorado- based solution.

ColoradoCare could resemble systems in Canada and some European countries, where every resident has health coverage financed by taxes instead of private insurance premiums, but Colorado would be the first U.S. state to pass an amendment offering universal health coverage for its resident citizens.

To receive the waiver from the federal government the state program must guarantee it can provide benefits at least as comprehensive as the essential health benefits that all plans in the individual and small group insurance market must cover. It must also provide cost-sharing protections and coverage at least as affordable as those in the marketplaces and assure that a comparable number of people have health coverage as under the current ACA law.

Advocates say they have such a state-based alternative in the form of Amendment 69 on the Nov. 8 ballot. If passed, it will establish a single-payer universal health-care system called ColoradoCare, run by an elected, 21-member board of regional trustees from around the state.

Under the proposed system, there would be no deductibles, and designated preventive and primary care services would have no co-payments. Beneficiaries would be permitted to choose their primary care providers and would still be covered when temporarily living, or traveling, in another state

Proponents say establishing a universal system would remove the complex, expensive bureaucracy created by multiple insurance companies competing in the ACA’s insurance exchange and replace it with a non-government healthcare financing system. The cost, labeled a premium tax, would be 10 percent of employment-based income.

Opponents say the new system would be a financial disaster and would induce physicians to flee the state.

Unfettered access

State Sen. Irene Aguilar, D, a physician and chief architect of the legislation, represents Denver Senate District 32. She has worked for two decades as a primary-care provider for Denver Health and Hospital, serves on their board and practices medicine at the Clinica Tepeya, caring for the uninsured.

“People are sick enough when they go to the hospital,” she told the Free Press. “It’s not good for a person on a budget. We see total costs of health care go down when patients have unfettered access to quality care because preventative care goes up.”

Aguilar was vice chair of the Colorado Health Benefit Exchange Implementation review committee, 2014-2015, an oversight committee established by the state legislature in 2011 to review and comment on the financial and operation plans of the state-based insurance exchange. Health insurance exchanges are regulated marketplaces in which individuals and small businesses can shop for health insurance, or be referred to public health programs.

She sponsored legislation to expand Medicaid in Colorado and align health laws with the ACA. In order to proceed if Amendment 69 passes, she explained, ColoradoCare must receive the required waivers and necessary funding from the secretary of Health and Human Services. Medicaid would not be reduced.

Kent Rogers, CEO for the Southwest Health System, Inc., which operates Southwest Memorial Hospital and the Southwest Medical Group, told the Free Press the implementation of Obamacare has been a boon to formerly uninsured people. “Everyone has always had access to the emergency room, but now they have greater access to consistent non-emergency care,” Rogers said.

“It is especially noticeable with diseases such as diabetes, congestive heart disease, as an example.” Rogers believes the ACA is a more reliable model for health care than the unknown Amendment 69, “because we don’t know what Colorado Care will actually do. There are more questions than answers.”

Rogers said his 17 months as director of SHS in Montezuma County is his first experience working with Medicaid expansion. The Amendment 69 program would “be a regressive move in Colorado health care,” he said. “Under the Affordable Care Act the percentage of uninsured Colorado residents has decreased from 14.3 percent in 2013 to the current 6 percent. That’s less than half of what it was,” and below the ACA target.

In a recent analysis of the proposed amendment, the Colorado Institute of Health, a nonpartisan health policy institute, says the plan would not directly employ health-care providers. They would continue to work for private practices, clinics, and hospitals and be reimbursed for the health services they provide, just as insurance companies, Medicare and Medicaid do now.

Private health insurance could still be available, but ColoradoCare would displace much of the private market. The system would be a lot like primary education. Taxes are paid to support public education. Even if a parent chooses to send their children to private school they still pay taxes that provide free education through twelfth grade. Although Amendment 69 would provide tax-supported health care to all residents, there would be nothing to stop people from buying private health insurance.

Providers would not be obligated to accept the rates set by the new single-payer system. However, ColoradoCare would dominate the insurance market, so it could be difficult for providers to avoid contracting with it, the analysis says.

“We don’t know what ColoradoCare will do,” Rogers said. “Maybe our qualifications as a provider would go away. Regulations will be designed by a 21-person board to cover the entire state. How will it affect our corner of the state? What’s the plan? It’s not written down. I have zero confidence.”

Unforeseen variables

The Colorado Institute of Health analysis expresses concerns around the board’s scope of authority to manage a costly program that has many unknown variables. It suggests that care providers might leave the state and that chronically ill patients may move to Colorado.

Retired Army National Guard Lt. Col. Retha Williams worked half her 27-year nursing career in the military and the other half in public, non-government practices. She retired to run a farm near Arriola, north of Cortez. She believes some of those concerns are exaggerated.

“I’ve heard doctors say they’ll leave the country, but I also know they are under a lot of pressure from insurance companies to join medical clinics and groups. The insurance companies make money by cutting back. Doctors are aware of pressure that can come from insurers if they sometimes spend too much money on their patients. It used to be that the medical profession was the strongest lobby in Washington, but now it’s the insurance companies.”

Williams has heard that there can be as many as 10 administrators, assistants and clerical staff hired for every doctor under the current system. She believes it’s time for something new.

“Even if this costs me more, I don’t care. Everybody deserves quality health care. I believe in this for the average citizen who needs help. I have seen it. I’ve seen people turned away in ER. It’s just not right.”

According to cost estimates projected for 2019 at the ColoradoCare web site, total premiums plus out-of-pocket expenses paid by state residents under the current system are slightly over $31 billion. The ColoradoCare package would cost taxpayers $4.5 billion less in that same year than the current system, according to the Amendment 69 website.

Some of the savings come from reducing redundant insurance-industry administrative services and decreased bureaucratic paperwork done at provider offices. Among other cost-saving benefits touted at the site, ColoradoCare will have the opportunity to purchase bulk pharmaceuticals and medical equipment which will supposedly reduce expenses by another $1.2 billion annually.

By midsummer, fears that the projected ColoradoCare savings are overestimated prompted Aguilar, who serves as assistant majority leader and chairs the Senate Committee on Health and Human Services, to clarify that Colorado’s Blue Ribbon Commission on Health Care reform projected a budget surplus with a single-payer plan.

In 2013, the Colorado Foundation for Universal Health Care published an economic analysis by Dr. Gerald Friedman, a health economist at the University of Massachusetts Amherst. It compared a Colorado universal health-care plan to the health-care system in operation at the time as well as to the scenario if the Affordable Care Act were repealed. The CHC cooperative proposal was renamed ColoradoCare in 2015. While the plan’s basic structure is the same as the 2013 proposal, many policy features have been refined. The analysis has been updated with 2019 projections.

The analysis “projected the surplus and the state’s fiscal note of Senate Concurrent Resolution 13-002 projected savings to our state budget,” Aguilar said. The full report is online at the Colorado Health Institute Economist site. “It is brief and well written, and I encourage everyone to read it,” she wrote on the site ColoradoPols/Politics, News and Inside Information.

Even opponents of universal health care admit costs would be reduced each year, she said, “resulting in a $2 billion budget surplus and leading to fiscal sustainability through 2028 without premium increases.”

For two decades Aguilar witnessed firsthand the devastating effects of the inability to afford basic health care. “I was ecstatic to learn that there was a solution that was both socially just and fiscally conservative,” she said.

Will it work?

But Bud Garner, a member of the local, politically conservative 9/12 Project, is worried about the constitutionality of the amendment. “Where does it say in any constitution that health-care insurance coverage is a right that should be protected?” he asked.

He said there are no provisions in any federal or state founding document that guarantee a right to health care.

“It’s a practical matter. Our tax rate would be far and away higher than New York’s. Somebody has to pay for free health care. We have reached the point that somebody [else] has to pay for what people want, like free health care. Look what happened to Obamacare. Big insurance companies are pulling out because they can’t afford to lose millions in profits every year.”

In August, a month after the Department of Justice blocked Aetna’s proposed $34 million merger with Humana, Aetna announced it would diminish its participation in ACA insurance exchanges by pulling care out of 15 state marketplaces due to a second quarter $200 million loss. The company statement follows concerns raised earlier in the year by other companies about the sustainability of the insurance exchanges that offer access to tax-subsidized health insurance.

UnitedHealth Group and Humana are scaling back their participation in the national ACA marketplace exchanges while Blue Cross Blue Shield is considering the option, although after evaluations of future 2018 projections they may re-enter the exchange.

Colorado is the 10th most competitive insurance market in the country, Rogers said. “Despite the public perception, it is a very competitive insurance market. When you abolish competition you take away incentive.”

But Williams’ has a different view. “I’ve been a nurse all my life. I’ve watched insurance premiums quadruple while people were turned away from primary care and emergency rooms for ridiculous reasons. Bottom-dollar prices to walk through the doors jumped from $25 to $125 in just one year. Yes, that was 20 years ago in Phoenix, but it was the beginning of this escalation.”

The Colorado Institute of Health, which does not advocate for or against the amendment, found both positive attributes and long-term negatives in its analysis. ColoradoCare would save billions of dollars in administrative costs and insurance-company profits, reallocating that money to coverage of remaining uninsured residents.

But the institute also projects that revenues won’t be able to keep pace with increasing health-care costs, resulting in losses during the first decade. Ultimately, the study concludes, the program would find itself in the same financial dilemma as the current health system.

“ColoradoCare is a constitutional amendment. How do you repeal it if it doesn’t work?” asked Garner. “Folks won’t. It historically just doesn’t happen.”

Rogers said his concerns are not answered in the amendment. “How’s the board going to decide what we get to do? I do not see how it’s currently written that we can accomplish lowering costs to provide higher quality,” he said. “If it doesn’t work and we want to [rescind] the amendment, it will require another constitutional amendment.”

Support for Amendment 69 is found on one site, ColoradoCare Yes, which has taken in nearly $700,000 in contributions. Ivan J. Miller, executive director of ColoradoCare Yes and a psychologist in private practice, provided approximately 31 percent of all in-kind donations in the form of printing services.

Two opposing sites, Coloradans for Coloradans and the Committee to Stop ColoradoCare, have garnered close to $4 million to fight the amendment.

According to Ballotpedia, the top donor in support of the initiative is Lyn Gullette, executive director of Cooperate Colorado and a psychologist in Louisville, Colo. She provided $122,000 to the campaign war chest.

Anthem, Inc., is the top donor opposing the amendment. The insurance company contributed $1 million, 27 percent of the opposition financing.

Provisions of ColoradoCare

Other key features of the system proposed under Amendment 69 are:

Employers would pay 6.6 percent in lieu of the medical portion of workers compensation, providing substantial savings in premium and administrative costs to businesses that currently provide employee medical insurance.
Individuals would be responsible for the remaining 3.3 percent premium paid on before-tax income. Self-employed taxpayers are responsible for the full 10 percent on net income, equivalent to the federal self-employment tax formula, as are people with non-payroll income sources, such as capital gains.
However, high-income earners would pay ColoradoCare taxes only on income below $350,000 for a single person or $450,000 for married couples who file jointly. All premium money paid to Colorado Care is tax-deductible.
Premiums are collected from everyone based on their individual ability to pay. All money collected from the premium tax would be pooled to provide for the operations of ColoradoCare, establish the authority to purchase pharmaceuticals and medical equipment, fund an office to prevent and investigate fraud and establish rules and procedures to assure financial sustainability.
The Colorado Care website provides a calculation worksheet sheet for individuals, families and businesses. According to their studies, 80 percent of Coloradans will pay less for health coverage than they do now.
The payment schedule exempts individuals on Medicare making less than $33,000, and joint filers at $60,000.
In addition, the tax premium proposed is designed to allow exemptions to pension/annuity income in accordance with Colorado law. The deduction allows exemptions of up to $20,000 or $24,000, depending on the age of the taxpayer.

Resources

The following websites provide information on Amendment 69, ColoradoCare:

Description, Support and Opposition Financing

Ballotpedia, a neutral, accurate encyclopedia. Search: Colorado Creation of ColoradoCare System. Click on key links and people, such as Sen. Irene Aguilar (D-32). https://ballotpedia.org

Analysis

Colorado Institute of Health, http://www.coloradohealthinstitute.org/ Search: Key Issues ColoradoCare

Support

https://www.coloradocare.org and http://www.coloradocareyes.com

http://senatorireneaguilar.com/index.html