Health care for all could cost $26.6B

ENGLEWOOD - Plans to increase health care access in Colorado could cost anywhere from $890 million to $26.6 billion a year, a governor-appointed group examining the subject learned Thursday.

The Blue Ribbon Commission for Health Care Reform did not take a position on which of the four studied plans it favors or set concrete details on a fifth option still in the works. The commission will explain the pros and cons of each of the ideas to the Legislature in January.

It did, however, get the first comprehensive cost breakdown of the four ideas, as well as comparisons on how many of the state’s 792,000 uninsured residents would be covered under each option.

The proposal that drew the most attention was the costliest — a Canadian-style singlepayer system in which private insurance plans would be replaced by a government-run system. The $26.6 billion cost, which is $8.4 billion more than the entire current state budget, is $4 billion a year less than the combined annual public and private costs of health care in Colorado.

An analysis of the plan states that imposing a 6 percent payroll tax, raising the state income tax from 4.6 percent to 12.7 percent and significantly increasing alcohol and tobacco taxes would raise $15 billion a year. Combined with other savings and revenue sources, the spending would still be less than the combined amount that employers put to insurance, individuals pay for health care and the government subsidies for medical access for elderly and the poor, according to the report from The Lewin Group.

But the increase in income tax would mean families with an average household income of more than $100,000 could pay more each year, and families that make as much as $250,000 could fork over more than $30,000 a year. Meanwhile, small businesses that often don’t offer insurance would pay thousands of dollars a year more through the payroll tax.

Advocates argued that going to a single-payer plan should not be viewed as a financial move as much as a new way of looking at insuring residents.

“Health care is not a cost,” said George Swan, a hospital administrator and member of Health Care for All Coloradans, which wrote the singlepayer plan. “It’s an investment in our country to bring people back into the work force.”

But some commissioners questioned whether a singlepayer system would have any benefits to the state and said they were skeptical of the numbers in the plan.

“They just said we could save money if we go to a single-payer plan that has a bigger plan of benefits than anything that exists?” asked Commissioner Linda Gorman, the health care policy center director for the Independence Institute, a free-market think tank. “Does that make sense to anybody?”

Two other proposals mandate that every Coloradan have insurance, and they and a third option all feature some sort of expansion of government health care plans and subsidies for low-income residents to purchase insurance.

Their costs range up to $3.1 billion, and the plans would bring between 40 and 86 percent of the state’s uninsured into private or public plans.

“With the exception of single-payer, none of the proposals proposed significant reform,” said Commissioner Mark Simon, a consumer advocate. “The proposals all proposed giving the insurance industry more money.”

PROPOSALS SOLUTIONS FOR A HEALTHY COLORADO

Requires residents to purchase health insurance; expands Medicaid eligibility for children, pregnant women and parents of minors; offers tax credits for adults at less than 250 percent of poverty level.

Cost: $1.37 billion

New revenues: $853 million

Percentage of uninsured who become insured: 82.5 percent

Annual benefit cap: $50,000

BETTER HEALTH CARE FOR COLORADO

No mandates; increases public health-plan eligibility for children and pregnant women, offers subsidies to adults and creates a group buy-in for small businesses.

Cost: $980 million

New revenues: $389 million

Percentage of uninsured who become insured: 40 percent

Annual benefit cap: $35,000

A PLAN FOR COVERING COLORADANS

Mandates employer health care, expands Medicaid eligibility for all and offers a premium subsidy program to everyone but the aged.

Cost: $3.15 billion

New revenues: $2.01 billion

Percentage of uninsured who become insured: 86.3 percent

Annual benefit cap: No cap

COLORADO HEALTH SERVICES PROGRAM

Replaces private insurance and existing programs with a singlepayer system funded largely by a payroll tax and increases in income, alcohol and tobacco taxes.

Cost: $26.6 billion

New revenues: $15.03 billion

Percentage of uninsured who become insured: 100 percent

Annual benefit cap: No cap