Experts debate the economics of Colorado’s single-payer proposal

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A November ballot measure to create a single-payer insurance system in Colorado has sparked debate among residents and experts over whether the program that would eliminate premiums and deductibles is financially sustainable.  

ColoradoCare, the state-run program proposed under Amendment 69, includes a 10 percent payroll tax increase, two-thirds of which would be paid by employers, with the remaining one-third funded by employees. Proponents of the bill say the payroll tax would inject $25 billion into the program by 2019 to help cover healthcare costs, while eliminating premiums and deductibles for Colorado residents, according to Colorado Public Radio.  

Public support for the single-payer system is mixed, as is the economic analysis from experts. In August, the Colorado Health Institute (CHI) released a report that found ColoradoCare could save $2.7 billion in the first year by eliminating administrative costs and profits tied to private insurers.

But CHI President and CEO Michele Lueck told CPR that the program would struggle to keep pace with rising health costs, echoing the report’s finding that even with a tax increase, ColoradoCare would still end up with a $253 million deficit in its first year. CHI’s analysis also estimates that the state-run program would end up with $6.8 billion in federal Medicaid waivers--$4 billion less than proponents suggest--which would significantly alter the program’s expected revenue.

Proponents of the amendment, though, told CPR the assumption that Colorado wouldn’t receive all its Medicaid waivers was “blatantly unfair.”

Colorado is not the first to experiment with a single-payer system. Vermont dabbled in this approach in 2011, amid predictions that its state-run program would generate immediate savings and lower healthcare costs. In 2014, after a three-year run, the state abandoned the plan in part because of a shortfall in anticipated funding from Medicaid and the Affordable Care Act. Still, Vermont Sen. Bernie Sanders has remained a staunch proponent of a national single-payer system.