Heath care: A right or a privilege?

As Colorado voters weigh in on Amendment 69 this fall, they are the first in the nation to consider a single-payer health care system where a statewide system, funded by taxes, replaces individual insurance premiums paid to private companies.

The concept of single-payer health care is not new. The United Kingdom began implementing such health care policies post World War II. Countries across Europe, as well as Canada and Australia, instituted some form of the concept in the 1980s.

The United States, on the other hand, relies on a privatized system dominated by for-profit insurance corporations. As a result, the U.S. spends more than any other country on its health care — 17 percent of annual gross domestic product in 2013 — while approximately 28.4 million Americans remain uninsured, including 350,000 Coloradans. The 2012 Affordable Care Act sought to remedy this problem of inequity while continuing to allow for private corporate profits within the system, but it has proven inadequate to fully address the health care needs of average Americans.

However, the law does provide a waiver system for states to innovate alternative methods of health care coverage and Amendment 69 proposes a statewide health care system utilizing this waiver program to enable the first universal health care system in the U.S.

Deemed ColoradoCare by its writers, the measure would essentially replace individual insurance premiums with a 10 percent income tax wherein employers would pay 6.67 percent and employees 3.3 percent of the new tax. For nearly all working people, this would represent a significant savings on their cost of healthcare. For all other income, from self-employment to capital gains to real estate, etc., a 10 percent tax would likewise be applied should the measure pass.

ColoradoCare would allow for alternative forms of private insurance, but residents would still be required to pay the ColoradoCare income tax.

It is estimated the new taxes would bring in $2 billion for budget year 2017, increasing to $25 billion in new tax revenue by 2019. With the additional $11.2 billion still available from federal and state funds, the total annual funds budgeted for ColoradoCare is expected to hit $36.2 billion by 2019. The exact implementation date is undetermined by the measure.

If approved by voters, ColoradoCare would be governed by a nonpartisan, non-governmental 21-member elected board of trustees. The exact spending in the first few years would be determined by the governing board and could include costs incurred to gain federal approval of the measure. Beginning in 2017, ColoradoCare is estimated to spend $2 billion per year until the plan is fully implemented. The bill also gives the board the authority to terminate the single-payer system should the federal government fail to provide waivers, exemptions or funding, such as Medicare payments.

The ColoradoCare Yes campaign claims 80 percent of Colorado families would save on health care if the amendment passes. While it’s true the amendment would require increasing taxes by $25 billion per year, it is also true that this figure translates to $5 billion per year in savings for residents and employers who are currently spending $30 billion in health care costs each year.

Critics argue the new tax would give Colorado the highest taxes in the nation and would effectively double the size of the state budget. Furthermore, until ColoradoCare is fully implemented, citizens would be paying taxes without receiving any benefits.

Supporters say that is a small price to pay as ColoradoCare would cover all Colorado residents, including undocumented immigrants, and would take over the administration of Medicaid, including the federal funding.

If it passes, the state legislature and governor would appoint an interim board of 15, who would then set election guidelines for the eventual 21-member board of trustees. Opponents argue the board would be given too much unchecked power with the authority to set elections, campaign finance requirements, with little accountability to the state government. Although the state would collect the taxes to fund the system, the governor, legislature and Colorado courts would not have oversight of the board.

As written, ColoradoCare would not be subject to TABOR revenue limits, however voters would need to approve any future tax increases to support the program. The board of trustees would be responsible for setting an election schedule separate from other state elections for both electing board members and increasing taxes.

The ColoradoCare board would also be charged with negotiating rates with health care providers. Proponents argue this would reduce overall health care costs by reducing administrative costs, adjusting payments to providers while also ensuring they are paid for all services.

Opponents also argue the measure could negatively affect the quality and service levels of health care in the state. They fear passing the law could cause providers to leave the state, or opt out of providing for ColoradoCare patients if the rates are set too low.

Proponents claim that through ColoradoCare, 96 percent of health care costs would be covered. There would be no deductibles if the statewide system is implemented and no copayments for primary and preventative care services. Copayments for other services would be set by the board of trustees after the measure passes. Prescription drugs would also be covered, as would pediatric care, mental health services, designated dental, vision and hearing benefits, laboratory services, and women’s health and maternity care.

However, pro-choice activists have come out against the bill saying a previous (1984) state constitutional amendment preventing state-funded abortions would mean women wouldn’t have guaranteed access to the procedure if ColoradoCare passes.

The main opponents of Amendment 69 have raised over $4 million to defeat the measure, with significant donations from companies who profit from the current health care system such as HealthOne, which operates private hospitals, United Healthcare, KP Financial Services (Kaiser Permanente) and Centura. The health care giant, Anthem, Inc., contributed $1 million to the anti-69 campaign. Several elected officials have also come out against ColoradoCare, including Gov. John Hickenlooper and U.S. Senator Michael Bennet, along with other state, county and local representatives in addition to various business associations. A recent poll shows 78 percent of Colorado Medical Society membership is in opposition to the measure.

ColoradoCare is endorsed by progressive leaders from around the country including Senator Bernie Sanders, feminist and political activist Gloria Steinem and MIT professor and political observer Noam Chomsky. (See sidebar for Chomsky interview.)

The initiative has also been embraced by physician and State Sen. Irene Aguilar (D-32), and has drawn support from many Colorado physicians, nurses and business people.

There is no question Amendment 69 comes with some uncertainties. However, with individual health-insurance premiums expected to increase by approximately 20 percent in 2017 under the current system, and with the examples of virtually every other industrialized nation in the world already operating with a fair and just single-payer system similar to the proposed ColoradoCare system, we believe it’s time for Colorado to lead the way in establishing universal health care for all its residents.

Correction: The word million was changed to billion after $11.2 in paragraph seven. We apologize for any confusion. 

SIDEBAR: CHOMSKY ON AMENDMENT 69

The following interview was conducted via email.

Q: How important is Amendment 69 in the context of American democracy? Why is it important right now, at this point in history?

A: The U.S. health care system is an international scandal. By standard estimates, costs are about twice as high per capita as other industrial societies, and outcomes are relatively poor. Furthermore, standard estimates significantly understate the costs, because they do not take into account the costs to individuals — time wasted maneuvering the complexities of the system, for example. These are extensive, as everyone who has had to deal with the system knows — including, incidentally, [the Affordable Care Act], as I know even from personal experience. This massive waste traces back largely to the inefficiency of the privatized system — and even Medicare, which is far better than the general system, suffers from having to work through private insurers. Polls have shown for a long time that the public favors public health care, often by large margins — a rather striking fact, since there is little articulate support for it in the mainstream and substantial criticism. For example, when Obama proposed the ACA, a public option was favored by about 5 to 3, but was not considered. Often the states are laboratories in which constructive ideas and legislation can be pursued, and if successful, extended beyond. For these reasons, the Colorado initiative is of great current significance.

Q: Can you be more specific when you say “the actual costs ignored by these measures?”

A: For example, the costs of time and effort spent working through the complexities and bureaucratic inefficiencies of the system in order to obtain health care. This is a much more general problem. Economists choose not to take into account costs to users, only to providers. Thus if you have to contact your bank because of some problem or question, say an error in your statement, you call and receive an automated message with a list of options, which may not include what you want. You then work through their automated procedure, listening to music and a polite recorded voice telling you to just wait. Finally, if you’re patient enough, you will get to speak to someone who can answer your question. That saves lots of money for the bank, so it is “efficient” and “economical.” But it is costly to you, and that cost is multiplied by the number of users. Same with privatized health care. Analysts commonly observe that U.S. health care costs are twice those of comparable countries and with relatively poor outcomes, which is true, but it understates the costs. By a huge factor, in fact, if we take into account the hidden costs to individuals. Only one example. Same with the time wasted paying bills, and much else.

Q: Many opponents of universal health care say the ACA has made the system worse in the U.S., not better, and they argue a single-payer system, such as ColoradoCare, would do the same. What’s your response to this argument?

A: It’s not an argument: it is an assertion, which is simply false. To the extent that ACA is dysfunctional, it is because of the need to work through the extremely inefficient, bureaucratized, and costly private system. Thus Medicare is far simpler and more efficient, though not as much as it should be, because Medicare too has to work through the privatized system.

Q: Would you mind elaborating on your personal experience?

A: [I] don’t like to go into personal experiences. I happen to have health care through my university affiliation, but my wife had to obtain it through the exchanges. A painful experience, which wasted a huge amount of time. We’ve also had experience with national health care, in both poor and rich countries. The differences are dramatic.

Q: Why doesn’t the U.S. have universal health care like other industrialized nations?

A: The U.S. is to an unusual extent a business-run society. That is a major reason why it ranks so low among industrial countries in social justice measures generally. The political power of financial institutions, pharmaceutical corporations, and other concentrations of private power is so great that the public will is often overwhelmed. One even reads in the press that although the public might want national health care, it is “politically impossible” — meaning that private power will not permit it.

Q: How does Amendment 69 fit into this context of “political will” and even your previous criticisms of the media and how it reports on health care? Has it changed at all with the Affordable Care Act?

A: “Political will” in this context means the will of elected officials to represent their constituents instead of funders, lobbyists, and private power generally. The media, unfortunately, rarely capture these critical phenomena with any accuracy, scarcely even reporting what is consistently found in academic political science about the extreme failure of elected officials to represent their constituents. The ACA has not changed this noticeably. Amendment 69 would provide a welcome break in this very unfortunate pattern.

Q: What about the economic arguments, some even from key Democratic leaders in Colorado such as Governor John Hickenlooper, against Amendment 69?

A: The experience of other countries shows quite convincingly that universal health care is far more efficient economically, and in human terms as well.

Q: Reproductive rights advocates have come out against ColoradoCare because it doesn’t mention abortion in its coverage and they think it will actually limit access to such services. This is just one example of more liberal organizations coming out against the bill. Do you think the significance of the initiative lies in the over-arching principles behind a single-payer system and not in details such as these?

A: That has nothing to do with the difference between universal (“single-payer”) and privatized health care.

Q: Do you see health care as a human right rather than a privilege?

A: I agree with the Universal Declaration of Human Rights, to which we formally claim adherence, that health care is a human right. It’s quite true, and unfortunate, that elite opinion often prefers the stand of Reagan’s Secretary of State Jeane Kirkpatrick, who dismissed the social and economic provisions of the UD with ridicule as “a letter to Santa Claus.” But the primary opposition is, very simply, concentrated private power and its enormous political power in our semi-plutocratic political system.