In November 2016, Colorado voters will consider a ballot measure that would enact a state constitutional amendment creating “ColoradoCare,” a single-payer, government-run health care system in Colorado. Colorado would be the second state to attempt creating a single-payer health care system; the first was Vermont, which abandoned its plans in December 2014.
Single-payer systems face major obstacles that make implementation difficult, if not impossible. ColoradoCare’s creators have greatly underestimated the costs of implementing and maintaining a single-payer health insurance system and the effects it would have on individual patients and the health care market.
Supporters of single-payer have long argued health care is a natural right of all citizens and that a government-controlled system would and should make health insurance available to everyone. Single-payer systems, however, have proven unsuccessful when tried elsewhere. Coloradans need only look to the experiences of nations that have implemented it; single-payer does not necessarily lead to better health care.
Funding has always been the central problem with any single-payer model. ColoradoCare would rely on steep tax increases to pay for its costs. Altogether, ColoradoCare will increase the state income tax to 14.63 percent, which would be the highest rate in the country. Other taxes include a 6.67 percent tax on the total payroll of all employers and a 3.33 percent payroll tax on employees. These taxes would be exempt from Colorado’s Taxpayers Bill of Rights law, which requires voter approval for state tax increases and a refund of tax revenues if a surplus is generated. The new law would give the authority to increase taxes to ColoradoCare “members.” A member is defined as a person who is least 18 years of age and “whose residence must have been in Colorado for one continuous year.” This gives one group the ability to impose a tax increase on another, which is unfair tax policy.
In a study conducted by researchers at the University of Massachusetts, which was commissioned by the Vermont General Assembly, it was estimated Vermont’s single-payer system would need to raise $1.6 billion in new revenues each year to support Green Mountain Care. In fiscal year 2012, Vermont collected only $2.7 billion in total tax revenues.
According to the proposed amendment in Colorado, ColoradoCare would “administer a coordinated payment system for health care services and control the per capita cost of health care.”
In a 2015 paper, Linda Gorman, Director of the Health Care Policy Institute at the Independence Institute, argues this provision allows ColoradoCare to set a limit on overall spending while making health care a zero-sum game for state residents. “In practice, this provision would apparently make it illegal for anyone providing almost any health care service to accept any payment from a state resident that is not the same as the payment allowed by ColoradoCare,” wrote Gorman. This provision would give ColoradoCare nearly complete control over the health care system.
ColoradoCare would also create and maintain a “central database of medical records for management and research purposes” and a medical records and billing system accessible to providers and beneficiaries. The program has no penalties if ColoradoCare fails to adequately protect personal data, and because ColoradoCare is classified as a state health oversight agency, it will be exempt from Health Insurance Portability and Accountability Act privacy requirements.
In a report examining single-payer systems, John C. Goodman and Devon M. Herrick, both then at the National Center for Policy Analysis, argued other single-payer systems across the world have largely failed to provide needed care: “When health care is made free at the point of consumption, rationing by waiting is inevitable. Government control of the health care system makes the rationing problem worse as governments attempt to slow the use of services by limiting access to modern medical technology. Under government management, both efficiency and quality of patient care steadily deteriorate.”
In its issue suite on health care, The Heartland Institute argues the best way to preserve individual freedom, improve the quality of health care, and enhance the efficiency of the nation’s health care system is to empower individuals by giving them more control over the dollars spent on their behalf. Single-payer systems do the exact opposite. Colorado should resist completing the transition to ColoradoCare and instead pursue policies emphasizing consumer-driven health care.
The following documents offer additional information about single payer health care systems.
Amendment 69: What You Need to Know About the “ColoradoCare” Single-Payer Health Care Measure
Linda Gorman, director of the Health Care Policy Center at the Independence Institute, was appointed in 2015 to the Colorado Commission on Affordable Health Care. This Issue Brief highlights seven things people need to know about Amendment 69, “a state constitutional amendment which would create ‘ColoradoCare,’ a single-payer, government run health care system in Colorado.”
Single Payer: Why Government-Run Health Care Will Harm Both Patients and Doctors
Robert A. Book, a senior research fellow at The Heritage Foundation, argues in this paper the establishment of a single-payer health care system would inevitably result in lower payments for physicians and other health care providers. “The immediate effect of having a single (‘stingy’) payer would be lower incomes for physicians and a reduction in the supply of active physicians, thereby impairing access to health care for all patients. However, the result of ‘single/stingy payer’ health care will not only be lower incomes for physicians now but reduced access and lower quality health care for future generations as well.”
Green Mountain Care Could Cost Vermonters Nearly $10 Billion a Year
Writing in the Heartlander, Sarah McIntosh discusses a report to Vermont lawmakers that raises concerns about the costs of implementing Green Mountain Care, a proposed universal single-payer health care system for the state: “The report, ‘Costs of Vermont’s Health Care System Comparison of Baseline and Reformed System,’ was issued in November. According to its projections, Green Mountain Care would cost as much as $9.5 billion a year.”
Twenty Myths About Single-Payer Health Insurance: International Evidence of the Effects of National Health Insurance in Countries Around the World
Health care experts John C. Goodman and Devon M. Herrick identify 20 myths about single-payer health care and provide evidence single-payer is inferior to our admittedly flawed current system.
Issue Brief: Healthcare & Single Payer
The Ethan Allen Institute examines recent developments in health care reform in Vermont, including the state’s single payer proposal. The author describes the single payer program and concludes it may not work the way its supporters claim.
Vermont Continues Push Toward Single Payer System Without Funding Clarity
Writing for the Heartlander, Loren Heal reports on the push in Vermont to implement the nation’s first single-payer health insurance program. Heal reports its main flaw is funding. It remains unclear how the state plans to pay for the $1.6 billion annual cost of the program.
Research & Commentary: The Dangers of a Single-Payer Health System
Kendall Antekeier of The Heartland Institute argues single-payer systems do not benefit patients but instead place them under government control while subjecting them to inferior health care.
Ten Hard Questions about Single Payer Health Care
The Ethan Allen Institute identifies ten important problems with Vermont’s single payer health care plan, in the form of ten questions about the program’s structure, funding, and prospects for long-term success.
Vermont Single-Payer Plan Full of Holes
Joshua Archambault of the Pioneer Institute argues Vermont’s single-payer plan has many serious, fundamental problems that should not be lost in the excitement that seems to arrive whenever a state tries something big. “Many of the issues that a single payer system is attempting to address can be dealt with by greater consumer engagement, a federal tax policy change to delink insurance from employment status, and greater transparency in the health system,” he wrote.
Decoding the Language of Green Mountain Care
John McClaughry of the Ethan Allen Institute argues Vermont’s single payer plan is likely to result in “rationing, waiting lines, maddening bureaucracies, demoralized doctors and nurses, shabby facilities, obsolete technology, declining quality of care, and of course much higher taxation.”
Vermont Is Waking Up from Its Single-Payer Dream to a Taxpayer Nightmare
Tyler Hartsfield and Grace-Marie Turner of the Galen Institute argue against Vermont’s single payer system and conclude the state’s experience may act as a cautionary tale. “Maybe this exercise will help the left-leaning voters in Vermont and across the country realize that government services – even for something as worthy as health care – aren’t free,” they wrote.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at http://news.heartland.org/health, The Heartland Institute’s website at http://heartland.org, and PolicyBot, Heartland’s free online research database, at www.policybot.org.
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