For as long as I can remember, there have been legislative efforts in Colorado to either provide or offer a single payor system for health care. The main players have had different names that the reader may have heard of:: Medicare for All; Health Care for All, etc.
Now comes ColoradoCare. This organization is behind an effort to adopt, not a legislative solution, but an amendment to the State of Colorado constitution that authorizes creation of a statewide single payor system. The amendment has been tagged 69 and it will be on the November ballot.
Much will be made of this campaign, and there are a number of complexities and structural issues involved with this proposal that warrant serious consideration. In this blog post, I am going to limit my examination to serious structural defects of the proposal. For this, I will not address the issue of whether single payor is or is not a desirable form of health care delivery — that sort of discussion has a tendency to be philosophical — something that can be addressed elsewhere, and by others. As most of you know, I deal deeply in the Medicare customer market, which is mostly a single payor system.
Amendment 69 is slightly less than 11 pages of double spaced type. The title on the ballot begins "Shall state taxes be increased $25 billion annually in the first full fiscal year, and by such amounts that are raised thereafter, by an amendment to the Colorado Constitution………."
This is an initiative — meaning that the amendment organizers had to collect signatures in sufficient quantity to place it on the ballot. This they did, in excess of the minimum requirement.
Amendment 69 would create an agency of the State of Colorado to provide health care to all Coloradans. This agency (ColoradoCare) would be separate from all legislative and executive agencies of the state — in short, not accountable in any way to the Governor nor the Legislature. The new agency would take over all state and federal funding of health care programs, provide all health care services to all residents of Colorado, and would provide a central purchasing authority for health care services. There are provisions in the proposal that would allow ColoradoCare to take over all or a part of Medicare.
ColoradoCare would have unlimited taxing authority, not subject to the limits of the TABOR Amendment. It would be governed by a 21 person board, initially appointed, and then elected after 3 years, with 3 members coming from each of 7 districts — presumably the Congressional districts. These members are not subject to popular recall or impeachment, and could only be removed from their position by a majority vote of the other board members.
In creating this agency for the purposes of crafting and administering a health care plan for Coloradans, the amendment does not describe what this plan would look like. With few parameters (ie. no deductibles, ), the 21 member board will design the plan after it is initially seated. What will fill up this “empty vessel” is not known nor defined in 69.
The amendment establishes revenue to pay for this plan. For the first three years, ColoradoCare would assess a 1% tax on all income (payroll, plus all other income). After this, the rate would rise to 10% on all income. This is an additional tax and would not replace any other tax paid by Coloradans.
Finally, for this article, a number of waivers from and adaptations to Federal programs, laws, and regulations will be needed to make this work. Among these would be Obamacare, ERISA, income tax codes, Department of Labor and Health and Human Services (ie. Medicaid) regulations, etc — most of which would literally require acts of Congress to change.
How would this impact a small business? Here’s a real world example from an actual business here in the Denver area using the minimum taxes spelled out in 69. The business has 25 employees, 5 of which are eligible for health coverage. All others are part time and can not enroll on the employer plan. The company has about $3,000,000 in annual revenue and spends $36,000 per year on premium for the eligible workers. With Amendment 69, the business would see their “premiums” take the form of payroll taxes, and this would increase their payout to $132,000 per year. The business would still be responsible to collect Medicare and Social Security payroll taxes (15% between employer and employee). The employer would not be collecting 10% of “all other income” from employees as such other income would not be know to them. Employees would also have to pay this additional tax on their state income tax.
In summary, my structural objections to Amendment 69 are:: (1) establishment of a 21 member board that is exempt from recall or impeachment; (2) unlimited taxing authority placed into the hands of 21 people with no accountability to the voters, legislature, or governor; (3) the exemption from TABOR requirements; (4) the additive 10% tax on all income, which would make Coloradans the most taxed in the nation; and (5) the impact on jobs and economic development will be negative; (6) if passed, this would become part of the State of Colorado constitution. Removing it, if the citizens were displeased, would require another statewide vote to amend the constitution; (7) Amendment 69 language offers $25 billion per year as the cost of the program, however a recent analysis by the Colorado Health Institute concludes that it will actually cost $38 billion per year.
As mentioned above, there are numerous other issues, both philosophical and structural that bear the readers thoughtful examination. Below are some links for you to use to begin your review and draw your own conclusions::