Colorado’s Single-Payer Ballot Initiative
It’s late January in Colorado. We don’t know who the candidates for President will be. We don’t know who the Republican nominee for US Senator will be (at least eight people have declared). We don’t know if we’ll be suffering through a drought or washed out in floods (so far, snow pack as tracked by Denver Water is running a bit above normal). What we do know is one of the citizen initiatives that will be on the ballot: a constitutional amendment that would require the state to provide single-payer health insurance through a program called ColoradoCare. State-level single-payer programs have been proposed before. Some have even passed. None of them have ever been implemented. After reading through it, I think this ballot proposal is in the same situation: unlikely to pass if people look at the details, and unlikely to be implemented if it does pass.
Amendment 69 demonstrates both the good and the bad sides of ballot initiatives. On the good side, this is a topic that the General Assembly is unlikely to take up in the foreseeable future. A significant number of people are at least interested in the topic: more than 100,000 registered voters signed the petitions. That’s farther than most proposed initiatives get. On the bad side, it’s twelve pages long. It’s not written badly, as these things go, but it’s not great either. As an initiative now approved for the ballot, the language is frozen, no matter what sort of improvements might be suggested in the course of public debate.
To be honest, I don’t see how it can possibly pass, or at least how it could be implemented. Let me go through the three big reasons for that.
To start with, ColoradoCare isn’t really a complete single-payer plan. The amendment includes this:
ColoradoCare serves as a secondary payor to any health insurance plan in which a beneficiary is enrolled… ColoradoCare shall serve as a state health plan that pays for designated health care services for Medicare beneficiaries; except that ColoradoCare shall not pay for services: (a) Covered by Medicare parts A, B, and D; or (b) covered by a Medicare Advantage Plan that a beneficiary has with an entity other than ColoradoCare; or (c) that would have been paid by Medicare parts B or D had the beneficiary purchased those optional Medicare coverages…
Clearly, the state can’t force things on the federal government. I suspect that when things get far enough along in the federal courts, the state can’t tell Aetna that they can’t sell health insurance in Colorado either, and the state can’t tell IBM that they can’t buy health insurance from Aetna for their employees in Colorado like they do in 49 other states and the District of Columbia. This reduces one of the main indirect benefits of single payer: under single-payer, care providers know which diagnostic/treatment code combinations are paid and which aren’t, and what the amount will be, so they no longer need to hire more bookkeepers than nurses. 1
In addition to those problems, Amendment 69 assumes that the state will be able to get a variety of waivers from the federal government on various programs. They need waivers for the Affordable Care Act system, Medicaid, and the Child Health Plan Plus. To be blunt, they need the money those federal programs would spend in Colorado to help make the finances work. 2 The waiver question is more complicated in Colorado than it would be in most states. Because of our Taxpayer Bill of Rights (TABOR), ColoradoCare would be organized as a TABOR enterprise not under direct control of the rest of the state government. It is easy to imagine the Centers for Medicare and Medicaid Services saying “Whoa there, big fella. What’s this ‘enterprise’ thing? We deal with state governments that have general taxing authority, not special fees.” If the waivers are not granted, so that ColoradoCare does not receive those federal funds, and the tax levels specified in the Amendment turn out to be insufficient, the board of trustees is instructed to simply shut the whole thing down.
What about those taxes? The fiscal note done by the non-partisan legislative staff estimates about $25 billion will pass through ColoradoCare annually. That roughly doubles the size of the state government, based on spending levels. In addition to the federal dollars mentioned, substantial new state taxes are required. Adults who are covered by ColoradoCare will pay a 10% payroll tax (two-thirds paid by the employer) and a 10% non-payroll income tax with a cap on the total taxes to be paid (by my reading, the cap is $35K for singles and $45K for couples filing jointly, adjusted annually for inflation). Consider the impact that has on, say, the self-employed furnace guy who takes care of my heating system. In round numbers, he would now pay 25% in payroll taxes, starting from dollar one, then his federal and state income taxes. In return for the increases, he would no longer have to pay any premiums for private insurance and the business wouldn’t have to buy any worker’s comp insurance. Worksheets available at the organization’s web site suggest that some part of the payroll tax would be a deduction for both the state and federal income taxes. I’m not so sure, but I am not a tax accountant.
Much of that money would otherwise pass through the hands of big insurance companies, who will be… reluctant to give that up. Let’s just say that I’m confident that various groups of opponents will be putting up a lot of money for the ad campaigns. Colorado being a purplish swingish state these days, my mailboxes – both electronic and dead-tree versions – are already stressed out in election years. This is only going to make things worse.
ColoradoCare illustrates all of the reasons why past state-level attempts at single payer have failed. And why I believe future state-level attempts will fail as well. They can’t actually be single payer, in practice. The federal government is too deeply involved in health care for states to design a straightforward program; they have to twist and turn to get federal approval for too many things. And the state government gets a lot bigger. At least IMO, that’s a triple whammy that no state is going to overcome these days. This is an experiment that no state is going to manage to try.
Front page image by Michael Fleshman 
- Full disclosure. I have a personal interest in how things work with Medicare coverages and taxes. The organization behind ColoradoCare estimates that the program would take effect sometime in 2019. By that time, Medicare will be my primary health insurance.
- In another interesting wrinkle, before the PPACA passed, about half of all Medicaid spending went to long-term care (I’m not sure what the post-expansion figures are). Not medical long-term care, but simply the expenses of a roof, a bed, three meals a day and some oversight for the indigent elderly who can no longer completely care for themselves. Almost all states have received waivers from the CMS to use Medicaid dollars to provide in-home assistance because that’s so much less expensive than institutional care.
This is really a bummer. I have my reservations about a nationwide single payer and would really like to see it tried at a state-wide level (willing to support outsized national dollars going into the experiment to help with the experiment transition). Colorado seems like a better field test than the two other states that had thrown the idea around (Montana and Vermont).Report
You need a certain population and demographic diversity to make single-payer work — I’d prefer to see it tested in California, but Colorado isn’t too bad.
Then again, it’s not like single-payer has never been tried anywhere. That’s one of the weird thing about healthcare debates in the US. There’s about fifteen different models of universal coverage out there, ranging from full-on socialized healthcare to heavily market based solutions, all with at least a few decades of experience and data.
And yet, we still talk about it like we’re inventing it from scratch sometimes. (The weird hybrid model we have is unique, and yes, the ACA itself is pretty unique because it’s a patch on a crazy system anyways).
But I would have loved it if the debate over universal health care in America was a heavy debate on whether we wanted something modeled on France, Germany, the UK, Canada, Singapore, etc….
Sadly, instead we had six months of courting Olympia Snowe (no matter how crazy the proposal had to be to get her to look interested) and Joe Lieberman throwing fits over losing a primary (so dealing with whatever crazy thing he requested). It’s amazing it got done at all.
Then numerous lawsuits, of course.Report
I agree that California would be ideal. But Colorado isn’t bad at all with measures of diversity, geographic size, and a fair population.Report
Yeah. A total bummer. And what’s worse (maybe) is that it’s not even single payer but more like a “payer of last resort” sorta thing.
I wish I had more to say about a really good post, but I’m just too depressed.Report
I wonder how many of those who signed heard “single-payer” and thought “ACA only better”, rather than “supplement to Medicare”.Report
FWIW that’s how Canada got single payer health care – Saskatchewan instituted it first, then Alberta, then the feds proposed to fund 50% of any single payer program the provinces might institute, within five years of which the remaining provinces had single payer healthcare. Kind of the same way the US got same sex marriage, and the way they’ll get legal marijuana, both of which looked totally impossible right up until they didn’t.
The estimate of roughly doubling government expenditures sounds reasonable – healthcare accounts for something like 40% of provincial government spending in Canada.Report
Part of it was probably the times too. I doubt healthcare was 40% of provincial spending in Canada as it was implemented province to province. Most of the modern west implemented healthcare when it was cheaper/less effective and then evolved with it as modern medicine grew up. The US doesn’t have that option.Report
That’s a very good point. Switching into single payer now is a much bigger jump than it was in the 1940s and 50s, when far more conditions had a treatment course of “administer the most effective painkillers we can for the patient’s few remaining weeks of life”Report
Are Canadian provinces constitutionally mandated to run a balanced budget? That’s actually what really kills the idea of state-based single payer.Report
No, they are not, Canadian Provinces have bond issues just like the Federal Government does. That is not, however, an answer to cost concerns of healthcare. At some point you’ve gotta recoup the dough from the taxpayers.Report
Most US states can take on debt in the form of bonds, but only for specified things (eg, roads). What most of them are not allowed to do is borrow to raise cash for the operating budget. There are even exceptions to that. As of the middle of December, California has an outstanding debt of $6.2B in its unemployment insurance trust fund (effectively, money borrowed from the feds to meet UI expenses). That’s on the order of a year’s worth of UI payments for them.Report
For sure, to put that in perspective Nova Scotia, one of the smaller Canadian provinces*, has a provincial debt of 819 Million which is a debt to GDP ratio of 37.8%.
*And, granted, one of the poorest provinces.Report
Regarding this part of footnote 2 about long term care: “Almost all states have received waivers from the CMS to use Medicaid dollars to provide in-home assistance because that’s so much less expensive than institutional care.”
In-home assistance is only less expensive than institutional care under certain circumstances. As a part of of a mix of solutions, using in-home assistance for some patients does reduce the aggregate expense to the state of all long-term care. It is a solution for people who do not require all the services offered in a long-term care facility. These include relatively healthier individuals who lack severe cognitive impairment. Most importantly, these individuals usually have informal caregiving, typically from family members, available to them. The state saves money by shifting part of the care burden from paid providers to unpaid providers.
Providing the same level of care provided in long-term care facilities (24 hour supervision, some level of medical care and monitoring, bathing, cleaning, cooking, feeding, socialization, physical plant maintenance, etc.) to people living in their own homes without shifting part of the care burden would be far more expensive than providing those services within a facility.
I’m a fan of Medicaid waiver programs that allow people to stay within their own homes. At the same time, I think it’s important to know why these programs are less expensive. Some of that lower cost is due to unpaid caregiver/family labor.Report