Single-Payer in Colorado? Subsidies vs. Direct Contracting
Voters in the state of Colorado will vote this November on a proposed amendment to the state’s constitution – one that would make Colorado the second state to complete its attempt at a single-payer, state-subsidized healthcare system. The proposed system, “Colorado Care,” would be operated solely by the state’s government and funded by its taxpayers.
The fiscal impact of such an endeavor, if it were to pass into law? Colorado Care would increase the state income tax to 14.63 percent, which includes a 6.67 percent tax on the total payroll of all employers and a 3.33 payroll tax on employees – and, an increase that is exempt from Colorado’s Taxpayer’s Bill of Rights law (in other words, residents would not be given the opportunity to approve any future tax increases related to Colorado Care that would inevitably incur). And if an (unlikely) surplus ever accumulated, taxpayers would not receive a refund.
Sounds like a raw deal for the residents of Colorado.
In fact, Vermont’s single-payer healthcare model is already showing signs of unsustainability. The state’s Green Mountain Care program already needs an additional $1.6 billion in new revenues to keep it going, and that’s just for a single year.
And we haven’t even begun to touch on the manner in which Colorado Care would seriously compromise the quality of healthcare in the state. At the state level, the best doctors will leave the Colorado in favor of states where they stand a chance of getting paid. It’s happening in Vermont now. At the federal level, Obamacare is setting America on a slippery slope course toward care healthcare rationing – and counties like Canada have been there for years. Single-payer systems don’t work when the single payer is the government; history has proven it.
A much better alternative is the direct contracting model, which involves private businesses employers or a local government agency employer such as school districts, cities and counties directly contracting with healthcare providers as part of their employee benefit packages. This isn’t single-payer; the employee will contribute, just as employees do in traditional coverage models. Regardless, it’s a far superior model to single-payer subsidies: better care, immediate cost adjustments when savings can be achieved, and of course, endless plan customizations. Which option sounds better to you? To learn more, contact GM&A for a free healthcare consultation.