The Business of Life

Colorado Democrats attempting to pass universal healthcare face an uphill battle.

By Pax Hyde


On this November’s ballot, Colorado voters will have the opportunity to go where no state has gone before. Again. 

This time, the question is whether to approve or deny Amendment 69 of the State Constitution, which would create a new government entity dubbed “ColoradoCare” to manage a universal healthcare system. A new 10 percent payroll tax would generate funds for the program. Employers would pay two-thirds of the cost, and a tax on employee’s salary would cover the remaining third. ColoradoCare would be cooperatively owned by Colorado residents and overseen by a board of 21 trustees, three elected from each of Colorado’s seven congressional districts. The board would oversee tasks involving the delivery of and payment for healthcare, meaning negotiating with healthcare providers, regulating the quality of care and balancing the program’s budget. 

Supporters of ColoradoCare argue that the program would improve healthcare by streamlining the payment system—reducing costs while maintaining the same standard of care. The private system is inefficient, they say, because insurance companies have high administrative costs and charge a premium price to maintain their profits. A system managed by the government would reduce administrative costs and could negotiate bulk pricing for services because it would incorporate more patients. It would also reduce inflation of healthcare costs over time by managing the compensation for providers. Most importantly, it would provide care for people who suffer because they cannot afford insurance. 

Opponents of ColoradoCare raise issues that mirror those raised in the national debate over healthcare. A new tax would be a drag on the economy and may actually be more expensive for individuals than private insurance because people may consume more health services if they are free. Some would much rather have corporations managing their healthcare than bureaucrats, either because they believe government is more corrupt, or because they think corporations’ financial incentives drive them to offer better services. Opponents also worry that imposing restrictions on the health industry’s profits will cause providers and doctors to move out of Colorado, reducing the availability and quality of care. 

To give voters more guidance on the issue, the Colorado Health Institute (CHI) recently released an analysis of ColoradoCare’s financial feasibility. The CHI is a nonpartisan nonprofit that provides research on Colorado health policy. Their “most plausible” scenario has ColoradoCare running a slight deficit in its first year, then increasingly high inflation of healthcare costs. The analysts note that their predictions for the savings from bulk purchasing and increased administrative efficiency are less encouraging than the predictions made by ColoradoCare proponents.

The report acknowledges that its analysis relies heavily on assumptions about critical factors that could determine the success of the program. The biggest unknown is whether ColoradoCare would receive the same federal healthcare subsidies that the state currently receives for Medicare. The proposed amendment also does not specify how much of the costs would be paid by ColoradoCare and how much would be paid out-of-pocket by patients. There is also no way to know the exact percentage of Coloradans who would keep their private insurance and pay into the system without consuming any services. A five percent change in the participation rate would make the difference between a deficit and a surplus for the program. Lastly, future tax revenue determines the budget for government programs, so a significant recession in the near future could result in ColoradoCare being underfunded.

 Even if the economic analysis is hard to pin down, plenty of moral and ethical arguments have been made for and against universal healthcare. In fact, economics alone can be misleading when discussing healthcare because a different set of rules apply to healthcare than to other goods and services. There is a much steeper demand for healthcare than for other services (i.e., consumers are willing to pay almost any price for services that will significantly improve their health) because most people see the maintenance of their health as more of a right than a luxury. Healthcare addresses human suffering, so any discussion of healthcare is, in essence, a discussion of how we believe society should address suffering.

There is no general consensus that universal healthcare is ethical. Many argue against this notion based on the concern that it would worsen the availability and quality of care. Local businessman Jürgen Leiser says he is skeptical that ColoradoCare could improve our system. Leiser is a German immigrant who came to the Springs in 1964 and started Leiser Painting Company, which does most of the painting for Colorado College. Noting that Germany and Canada both have long wait times for health services despite high local taxes, he is convinced universal healthcare is flawed. 

“Healthcare needs to be reformed, but this is not the answer,” Leiser said. “Hopefully we have some smart people out there who can come up with a better solution.” 

David, a cashier at the downtown 7-Eleven, has an equally strong opinion on the healthcare debate. Though he was not familiar with ColoradoCare, he said he recognized a need for healthcare reform. To him, the key to a public venture like a universal healthcare system is creating a framework of social responsibility. If the new tax to fund ColoradoCare was instituted, consumers and workers would pay for it through higher-priced, lower-quality goods and thinner compensation, while shareholders would maintain their profits. He mused that many people make no effort to improve their lives and rely on society for more than they give back. He gestured to the apparently homeless people sitting by the storefront sidewalk as his proof. 

“It would be nice to have everyone under the same umbrella,” said David, in terms of the appeal of universal healthcare. But the ideal system would do more to combine investment in the collective welfare and personal choice. 

“You are free to do what you want, but you put something in as well.”

Representative Edie Hooton of Boulder House District 10 strongly supports the implementation of public healthcare.

“When you hear of people going bankrupt, it’s often because they paid more than they could afford for healthcare,” says Hooton. “And then that poverty affects whether they have enough money for food or new clothes for their kids to wear at school.” 

Because healthcare is the first thing consumers will spend money on, industry profits siphon money from other vital expenditures that could have a more significant impact for those who are barely getting by.

But even if one believes that the ideals behind a universal healthcare system are sound, the legal technicalities of the ColoradoCare amendment make the decision even more complicated. 

Rep. Hooton, for example, is concerned about the prospect of writing ColoradoCare into the State Constitution (which would be imperative if the referendum passes). If it were written into the Constitution, another referendum would be required to revise it. 

Hooton argues that referendums are usually a poor representation of public opinion because they often have low voter turnout and are therefore easily influenced by factions. It would be ideal to establish ColoradoCare through statutory law, which can be quickly changed by legislators informed on the issue.

A potent example of how the referendum system can cause lingering problems is the Colorado Taxpayer Bill of Rights (TABOR). The 1992 amendment limits the state’s revenue to a calculated amount based on population and inflation unless a tax increase is approved by a vote. Tax revenue received by the state beyond this limit is returned to taxpayers in cash. This has caused state revenue to stagnate despite a strong economy, seriously constraining funding for vital government services such as education and infrastructure. Though TABOR was initially framed as an act meant to give voters a greater voice, it is now incredibly difficult to amend even though many have come to regret it. 

Because ColoradoCare receives only tepid endorsement, writing it into the State Constitution without a reliable amendment process would be risky. State-level universal healthcare is totally untested in the U.S. The Vermont legislature voted in 2011 to establish a similar system, but it was nixed over tax concerns before coming into effect. Even Rep. Hooton wonders if “anything could be better” than our private healthcare system.