Colorado single payer proposal would save money at first, but require raising taxes later, analysis suggests

A proposed constitutional amendment to create a universal healthcare system in Colorado would nearly break even in its first year while extending coverage to all state residents, but it would slide into ever-increasing deficits in future years unless taxes were increased, according to a new analysis released Monday.

According to the report, issued by the independent Colorado Health Institute, ColoradoCare, the name for the taxpayer-financed entity to achieve universal coverage, would succeed in saving healthcare dollars by cutting billions of dollars in administrative costs and insurance company profits. However, the revenue designated for ColoradoCare to pay for the new universal coverage wouldn't be able to keep up with increasing healthcare costs after one year.

Specifically, CHI, a nonpartisan health policy institute, projects that ColoradoCare would need to make $36.3 billion in healthcare payments in its first year, slightly less than the $37 billion in the current system. But ColoradoCare also would have less revenue, $36 billion compared with $37 billion in the current system, resulting in a first-year deficit of $253 million.

CHI notes this is not a hugely significant loss — less than one percent of ColoradoCare's projected annual revenue. But, the group concludes, that deficit would grow every year.

The only way to cover the deficits would be for ColoradoCare to ask its members to approve tax increases in statewide elections, cut costs by offering fewer healthcare benefits or lower payments to healthcare providers, CHI argues.

An earlier analysis produced by the Colorado Foundation for Universal Health Care ColoradoCare paints a more optimistic picture, projecting that ColoradoCare would run a $1.5 billion surplus in 2019, its first year of providing coverage, according to The Denver Post.

ColoradoCare, on the ballot as Amendment 69, would replace most private health insurance. Purely federal programs, such as Medicare, TRICARE and the Veterans Administration, would continue to be the primary insurers for their members.

According to The Denver Post,the program would be funded via payroll taxes on workers and companies.

 

 

 

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