ColoradoCare: How Much Would A Universal Health Care System Cost?

April 11, 2016
Photo: ColoradoCare signatures (AP Photo)
In this Oct. 2, 2015, file photo, Colorado Sen. Irene Aguilar, right, who is a physician at Denver Health, helps deliver more than 156,000 signatures to put a health care question on the 2016 ballot, outside the offices of the Colorado Secretary of State, in Denver. The group ColoradoCareYES wants to see Colorado start the nation's first universal health care plan.

A new report shows how far-reaching a proposed universal health care system for Colorado will be if voters decide to approve it this fall

The Colorado Health Institute found that ColoradoCare would cover 82.6 percent the state’s residents, including those now on Medicaid -- the rest are covered through federal programs like Medicare and Veterans Administration. And ColoradoCare would have $38 billion annual budget.

It’s a complicated issue, with plenty of competing arguments. Here's what we know about the measure so far, based on the most recent report and other calculations:
 
What happens to private insurance:
 
It’s expected that many people would move to ColoradoCare, though there’s nothing to prevent folks from purchasing private health insurance. Think of the new system as a lot like our public school system. 

"Just because we have this public school system everybody is eligible for doesn’t mean everybody participates. But everybody is eligible to participate. It’s roughly the same with ColoradoCare," said Joe Hanel, who helped research and author the report.

The $38 billion cost raises alarm bells:
 
About $11 billion of that the state gets from the feds right now anyway -- mostly to cover Medicaid, the program for low-income residents. But the rest is largely new revenue. Critics will point out the entire budget though will exceed the state's overall budget by more than 40 percent. Many conservatives oppose it. So do some Democrats, including Gov. John Hickenlooper, who has called it "prohibitively expensive." He is in the camp of some Democrats, and business groups, who are arguing the state should stick with Obamacare and not start from scratch with something else.
 
What proponents say about that figure:

A couple of things. First, they argue that the initiative has laid out a plan to raise the new funds - so that’s not a problem. And secondly, they say in the long run the new program will save money, many billions, for the state.
 
How supporters say the new revenue would be raised:

First, Colorado employers would pay a nearly 7 percent payroll tax. Second, employees will pay a share too, about 3 percent of their gross pay. Then, the self-employed will be expected to contribute 10 percent of their annual net income.
 
How supporters say Coloradans will save money:
 
Proponents believe that with a single, non-profit payer system funded by taxpayers instead of many insurance companies that we have now, it’ll create a streamlined, more cost-effective system. Yes, consumers will pay those taxes and there will be some co-pays, but overall they will save money, the argument goes, because they would no longer be paying premiums, deductibles and out-of-pocket costs that go with the private system. Proponents argue the state as whole would save huge amounts of money by reducing administrative costs, reducing waste and fraud and being able to negotiate better prices for care and for drugs. All in all they see a cost savings for everyone -- the state, consumers, businesses -- of $6 billion a year.
 
What the critics say:
 
They question those numbers and whether or not they will be any savings at all. They are not fans of the proposed plan to raise those billions of dollars. Some believe health providers who don't want to participate, and high-income earners, will leave the state. They also argue that unlike a national system, like they have in Canada, Colorado's system would run into problems because the state would be running a different system than the rest of the country.
 
The ColoradoCare response?
 
ColoradoCare supporters think a good healthcare system will attract people and businesses, not drive them away. Health providers who support the plan say will especially welcome the change as it will allow them to focus on patient care and access to patients, instead of the hassle and cost of dealing with insurance companies. They also say yes, this isn’t Canada where everyone has the same system, but Colorado could become a leader for other states to follow if it works here.

Who's right?
 
Until an independent deep-dive economic analysis comes through, it's an open question. The Colorado Health Institute says it'll be releasing another study later this year.
 
We'd like to hear from you on this topic. How has your experience with the health system shaped whether or not you’d vote for this proposal? Share your comments on our Facebook page.

Useful links: