In November 2016, Colorado voters will decide on a new ballot measure, a state constitutional amendment that would create “ColoradoCare,” a new single-payer, government-run health care system in Colorado. Colorado would be the second state — Vermont was the first — to attempt the creation of a single-payer health care system. 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 as a whole. Under a single-payer health care system, the financing of health care services and health insurance coverage are governed by a single source: the government. Supporters of single-payer programs have long argued health care is a right belonging to all citizens and that a government-controlled system would successfully make health insurance available to everyone. The evidence shows these claims are not true. Coloradans should look to the experiences of nations that have implemented single-payer health care in the past. If they do, they’ll see the creation of a single-payer system often does not lead to better health care.
Funding has always been the central problem with any single-payer system. Even in Vermont, which has a very low population, the state funding required to pay for a single-payer program was virtually impossible to raise without serious and harmful spending cuts and tax increases. In a study commissioned by the Vermont General Assembly and conducted by researchers at the University of Massachusetts, the authors found Vermont’s single-payer proposal would need an additional $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.
Altogether, ColoradoCare will increase the state income tax to 14.63 percent, the highest in the country. These new taxes would include a 6.67 percent tax on the total payroll of all employers and a 3.33 payroll tax on employees. These taxes would be exempt from Colorado’s Taxpayer’s Bill of Rights law, which requires voter approval for 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.
Do Colorado residents really want to give the government the level of control over health care ColoradoCare prescribes? Linda Gorman of the Colorado-based Independence Institute argues ColoradoCare gives the state near-monopoly control over the health care system. Because the law makes it illegal for any provider to accept any payment from a state resident that is not the same as the payment allowed by ColoradoCare, it allows the program to control the cost of health care for everyone.
The amendment also raises privacy concerns. ColoradoCare would 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 federal privacy requirements. Given the track record of health care expansion efforts in other states, it is fair to question why ColoradoCare is given carte blanche with patients’ private medical data.
Single-payer systems across the world have failed to provide needed care and have caused rationing and a deterioration of medical innovation. When government sets prices on health care products and services — limiting the profit incentive of providers — efficiency, quality, and innovation will always suffer. Instead of imposing a monolithic single-payer system on Coloradans, the government should pursue policies emphasizing consumer-driven health care, such as health savings accounts, which empower individuals by giving them more control over their hard-earned dollars.