COLORADO SEEKS ANOTHER FIRST - UNIVERSAL HEALTH CARE

In recent years, Colorado voters have displayed the pioneering spirit the state is known for by leading the rest of the nation in legalizing access to medical marijuana in 2000 and becoming the first state to allow the commercial cultivation and sale of recreational marijuana in 2012. In November 2016, Colorado voters will once again achieve a “first in the nation” distinction when they get the opportunity to vote on a ballot initiative that would make Colorado the first state to create a “universal,” single payer health care system, as an alternative to the Affordable Care Act (ACA).

After a similar single payer health care proposal failed in the state legislature in 2013, backers of “ColoradoCare” opted to use the ballot initiative process to bring the issue to voters this year. After a successful petition drive in 2015, Amendment 69 cleared all procedural hurdles to make it onto the state ballot nearly a year in advance of the 2016 general election.

The measure allows Colorado voters to decide whether to create a taxpayer-funded system to provide universal health coverage for all state residents. This is possible because, beginning in 2017, states may seek waivers to set up their own approved health care solutions, as long as they meet the standards of the Affordable Care Act. Not only will voters receive the opportunity to determine the course of health care reform, but the changes proposed by ColoradoCare would make Colorado the first state to implement coverage requirements far beyond those included in the ACA or any other single state’s attempted reforms.

Amendment 69 seeks to replace aspects of publicly funded health care under the Medicaid and Children’s Basic Health Programs, as well as the medical care portion of workers’ compensation insurance. Although other states have considered pursuing “Section 1332 Waivers” to the ACA, available beginning January 1, 2017, none have suggested changes as sweeping as the scheme proposed by ColoradoCare. The initiative’s stated goal is to promote universal coverage for Coloradans and capture a projected 83 percent of eligible Colorado residents.[1]

The fundamental premise of ColoradoCare is to pay for health care services regardless of the cause of the patient’s illness or injury. ColoradoCare assumes responsibility for individuals eligible for Colorado’s Medicaid Program, The Children’s Basic Health Plan, optional Medicaid program benefits, and the Colorado Medical Assistance Act. There would not be any deductibles, and designated preventive and primary care services would not have co-payments.

Distinct from previous attempts at health care reform, ColoradoCare also incorporates all reasonable and necessary medical expenses incurred by workers who suffer injuries or illnesses arising out of and in the course of their employment, for which employers required to purchase workers’ compensation coverage would normally be responsible. Since some employers may be exempt from the requirements of the Workers’ Compensation Act of Colorado, ColoradoCare may expand protection for employees who find themselves without medical coverage of any kind after a work-related injury or illness while working for an exempt employer.

Opposition to ColoradoCare focuses most directly on the $38 billion budget. Although Colorado already receives about $11 billion in federal funding, mostly from Medicaid, additional funding will come from the creation of a new $25 billion tax to be paid by state residents and employers. For comparison, Colorado’s proposed state budget for fiscal year 2016-17, which funds everything, including schools, roads, higher education, and Medicaid, was $27 billion. The proposed $25 billion tax to fund ColoradoCare will only fund the initial startup costs for the health care plan. This tax will be assessed on employers at a rate of 6.67% and on most sources of personal income including a 3.33% tax on payroll income, and 10% tax on all non-payroll income. Even after the imposition of new taxes, consumers’ co-pays will exist for anything other than primary care/preventative services, although deductibles are eliminated. The plan also includes a smaller startup tax on payroll and non-payroll income which could be charged for up to three years before the plan begins paying benefits. The final text of the initiative and the fiscal estimate can be found on the Colorado Secretary of State’s website. [2]

An independent analysis of ColoradoCare by the Colorado Health Institute, released April 8, 2016, the first in a planned series of reports, makes note that ColoradoCare is not a true single-payer system, because federal programs (primarily Medicare) and private insurance companies would continue to provide coverage for some Coloradans. In providing “universal coverage,” it simply seeks to offer health coverage to all Colorado residents. This does not prohibit private health insurers from operating in Colorado but it certainly would reduce their role. ColoradoCare would serve as a secondary payor to any health insurance plan in which a Colorado resident chooses to enroll, presumably maintaining a disparity in health care coverage available depending upon income.

As ColoradoCare contemplates amendment of the state’s workers’ compensation laws to transfer authority to ColoradoCare for health care expenses, it is unclear how it will alter the private workers’ compensation insurance market. Private insurers offering non-medical workers’ compensation benefits will need to adapt their products and rates significantly to continue writing such coverage in Colorado. If Amendment 69 passes, insurers may determine that withdrawal from the Colorado market is the only option, which could have unforeseen business consequences.

The only certainty is that Colorado will again be a test case for a concern with national appeal. Section 1332 of the ACA permits any state to apply for a “State Innovation Waiver” to “pursue strategies for providing their residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA.”[3] Vermont was the first to announce it would attempt single-payer health care system reform by legislative initiative, but state leaders abandoned the effort after concluding that their economy and small population (626,000) could not handle the tax burden necessary to fund the plan.[4] On September 9, 2015, Hawaii was the first state to draft a potential Section 1332 waiver and posted it for public comment. However, the Hawaii proposal seeks to broaden certain sections of the ACA versus creating an entirely new health care system like ColoradoCare. Supporters of single payer health reform in Washington are currently facing a deadline of July 8, 2016 to obtain the required number of signatures to place the issue on the November general election ballot. A handful of other states including New York, Oregon, and California continue to try to rally support to seek a Section 1332 waiver and move their states toward health care reform. The issue is not unique to Colorado. Proponents of ColoradoCare argue that universal coverage can only be achieved by systemic rather than incremental changes. Opponents, among them Colorado’s Governor John Hickenlooper, contend that such changes are not necessary as “Our reforms are just beginning to bear fruit and it would be premature to dramatically remake our health care system at this time.”[5]

The public campaigns by each camp have begun in earnest in preparation for Colorado’s now familiar position of voting under the national spotlight. Each has a multi-million dollar budget and a website to showcase their respective arguments and supporters.[6] Information and opinions on the topic are abundant and are expected to increase as the marketing campaigns peak this summer. But the answer is not readily available to the question of whether Colorado will make electoral history again. Amendment 69 is the only state-wide initiative on the ballot this year and it has already drawn national attention from the press and presidential candidates alike. The outcome of the last Colorado initiative watched with keen interest, the marijuana legalization amendment, was not certain until election day when it passed with 55 percent of the vote. [7]