Frustrated with the outcome of the Affordable Care Act, the people of Colorado have decided to consider adopting a single-payer health system. What’s behind this?
The cost of providing health insurance through the federal exchanges will increase this year due to subsidies.
The Congressional Budget Office anticipates that 13 million Americans will buy health insurance through the ACA exchanges in 2016, with 11 million of them receiving subsidies to help pay their premiums. Insurers will collect $4,308 per each of the 11 million subsidized enrollees—a whopping 53% increase over the $2,810 per enrollee that the CBO estimated that it would cost back in 2010.
The Blue Cross Blue Shield Association just published a “Health of America Report,” which states that medical costs for public exchange enrollees are 22% higher on average than those for traditional privately insured consumers. The report goes on to say that the ACA enrollees have higher rates of certain diseases, receive significantly more medical care and take advantage of more inpatient admissions, outpatient visits, prescription drugs and emergency room visits.
The ACA is insuring more people and that is a good thing. Unfortunately, costs are soaring because the law was focused on insurance reform rather than healthcare reform. It largely ignores the consumer experience and the real driver of rising premiums – a lack of transparency with regard to healthcare costs and quality. In short, the law is not consumer-centric and fails to provide the information that consumers need to make informed choices.
Frustrated with the ACA’s construct, the people of Colorado have decided to consider adopting a single-payer health system. This comes in the wake of the shutdown of Colorado HealthOP, a state and federal subsidized health insurance cooperative that was forced to close when it received a far smaller federal subsidy than it had anticipated. Colorado HealthOP’s failure forced more than 80,000 people to find new health plans.
Dubbed the Colorado Care Plan, the proposed single-payer health system would guarantee coverage for everyone, doing away with deductibles and allowing consumers to choose doctors and specialists without regard for those “in network” versus “out of network.”
Details of the proposed plan are vague, its size and cost unaffordable, and it would introduce a new 10% tax on payroll and incomes to pay for the program. If the ballot measure passes, the new system would take effect in 2019 and be structured like the healthcare co-op that just failed—only bigger. Huh?
Jeanne Nicholson, a former Democratic state senator said, “We don’t understand why we should compromise and say some people can have bronze coverage, some can have silver and some can have gold. Why can’t we all have platinum plus?” That sounds wonderful, who doesn’t like free platinum plus?
Some estimates suggest that this program would cost $38 billion—or more than Colorado’s entire state budget. And while a 10% tax doesn’t sound all that expensive, it would place Colorado near the top of the list in state taxes.
The larger problem is that it would put control of future healthcare costs and quality in the wrong hands. And when costs rise—because they will—the government will respond by raising taxes and restricting the amount of healthcare each resident of Colorado can use.
Heads up taxpaying residents of Colorado! Take a page out of Vermont’s book and check out the early returns on the ACA. Do the math and accept that there is no such thing as free healthcare. Free sounds good until the bill comes. Instead of adopting a single-payer system, pass legislation to make your healthcare costs and quality transparent by investing in technology that converts raw data into consumer-centric, actionable information. And then, once you have that, watch the free market do what it does – lower costs and improve quality.
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