by Michele Swenson
Board Member, Health Care for All Colorado
Co-Authors of Colorado Health Services Single Payer Proposal
January 2, 2008
Overview: Colorado Blue Ribbon Commission for Health Care Reform
(Draft) Final Report / Recommendations to the Colorado General Assembly (Due Date: 1-31-08)
During its 15-month length of service, the Colorado Blue Ribbon Commission for Health Care Reform — comprised of 27 members statewide appointed by two governors and 4 legislators — will have received 31 proposals (23 comprehensive, 7 Single Payer). Five proposals were selected to be evaluated by the Lewin Group, including an additional proposal written by a subcommittee of the Commission. The Colorado Health Services Single Payer Proposal is the only reform proposal that demonstrated any savings for the state — $1.4 billion — and also the only one capable of providing comprehensive health care for all. The Colorado Commission chose to base most of its recommendations on its own (5th) Proposal.
The 208 Commission Recommendations fail to address:
* Rising cost of health insurance premiums (82% increase in 6 years in Colorado), as well as copays, deductibles and prescriptions
* The U.S. fragmented commercial health insurance system that siphons more than 20 percent of health care dollars to profits, exorbitant CEO salaries, etc. and duplicative layers of administrative waste.
* A greater than doubling of median family income spent on health insurance: 7.7% in 1987 to 19% in 2005
* As premium costs continue to increase, coverage has decreased: “Insurance does not equal health care.”
The 208 Commission’s proposed solution:
* A cornerstone of the Commission Recommendation is the Massachusetts-style ‘Individual Mandate’ to purchase private insurance, with a substantial tax penalty for failure to comply.
* The Commission counts heavily on taxpayer subsidies to private insurances.
* The Commission asserts that all cost-shifts are due to the uninsured – yet Lewin’s Graph on Cost Shift shows that the uninsured and underinsured combined (labeled ‘self-pay’) contribute less than 20% to the total cost-shift burden. John Sheils of the Lewin Group informed the Commission that half of all uninsured payer their own health care bills.
* The Commission Recommendation states: “A minimum benefit plan – a leaner health insurance package with high deductibles, annual caps or limited benefits (average monthly premium $200/individual) is considered essential for assuring availability of an affordable product.”
Shortcomings of 208 Commission Recommendations:
* The Massachusetts-style ‘Individual Mandate’ creates a captive market for commercial insurance without attaching either quality or cost controls to insurance charges. In Massachusetts, 2008 marks the 8th year of average double-digit premium increases, resulting in more who cannot afford insurance and are moved into subsidized or public insurance at taxpayer expense. (Boston Globe, 9/13/07, 12/5/07)
* The 208 Commissioin seeks to solve one problem by exacerbating another — by moving more of the uninsured into underinsurance, or Minimum Benefit Plans. Attributing all unpaid medical bills to the uninsured and to under-reimbursed public programs, the Commission disregards the rising trend of unpaid medical bills by the underinsured. The annual TrendWatch Reports of the American Hospital Association reveal that out-of-pocket costs have risen from $146.3 billion in 1995 to $249.4 billion in 2005 – a 59% increase that parallels the 60% increase in unpaid medical bills over the same period. See Graph of Increasing Out-of-Pocket Expenses.
* The Families USA Report Too Great a Burden: Colorado’s Families At Risk (12-13-07) reveals that 1,054,000 people under the age of 65 in Colorado are in families that will spend more than 10% of their family income on health care costs in 2008 before accounting for taxes. Out of these people, the vast majority, 82.6%, have insurance. Out of these Coloradans, 299,000 live in families that will spend more than 25% of their pre-tax income on health care costs in 2008. The numbers of underinsured people have increased since previous studies in 2000, and as a result, put thousands of families at risk due to a growing health care burden. Families USA: Colorado’s Families At Risk
* As premium rates continue to rise faster than the rate of inflation or wage increases, more employers will either drop health coverage or move employees into Catastrophic ‘Minimum Benefit Plans’ with high out-of-pocket costs that leave families vulnerable to increasing health and financial risk, and also contribute to over 50% of personal bankruptcies precipitated by high medical bills.
* The Commission Recommendations add many new categories of coverage, eligibility testing, and new departments of administration, as well as taxpayer subsidization, multiplying administrative and public costs of health care.
Some goals defined by the Commission — “to provide consumers with “a choice of insurances” and to “ensure the ongoing viability of Colorado’s insurance markets” — falsely equate insurance with health care access. People want a true choice of health care, not choice of ‘minimum benefit’ insurances. The Commission Report begs the question: Is reform intended to insure the bottom line of the health insurance industry, or health care access for all?
It is telling what the Commission left out of the final report — Statements from the Vulnerable Populations Task Force Report to the Blue Ribbon Commission, September 28, 2007:
* “Mandating the purchase of a minimum benfits package forces residents to pay for underinsurance and is in direct conflict with the guiding principles of the Commission. We must not exchange our uninsured for masses of underinsured.”
* “The Lewin analysis established that current expenditures in health care would finance comprehensive health insurance for all Colorado residents under the Colorado Health Services proposal with $1.4 billion in savings to the state of Colorado. We should not consider healthcare to be a commodity, as we do not choose to get sick. The Vulnerable Populations Task Force asks the legislature to have the vision to do what is best for all the residents of Colorado. If this is not possible, we offer our recommendations on elements of health reform that could benefit Vulnerable Populations.”
Single Payer merited just 4 sentences in the Commission’s final report. Single Payer: “…viewed by the Commission as being too disruptive of current coverage and also unworkable in a single state.”
Nevertheless, the Single Payer model is uniquely capable of overcoming many problems that the current system and other proposals cannot. No other proposal would create a single Health Trust Fund combining administration of all health care monies, insulated from the politics of the State General Budget (and such constraints as TABOR and Averschoug-Bird, etc.).
Single Payer transparency and accountability of data overcomes the problem of secret proprietary data of numerous private insurance companies, and permits evaluation of best practices and outcomes in a statewide Health Information Technology system. While all other proposals call for substantial increases of state Medicaid spending (funds constrained by General Budget rules that simultaneously limit spending in other areas), Single Payer alone can create a true cost-effective single-risk pool insurance by consolidating multiple categories of medical care that now fall under such categories as Auto, Workers’ Comp and Medicaid/Medicare, to eliminate administrative waste. Single payer can overcome the federal limits on provider reimbursements that hamper Medicaid/ Medicare. Only Single Payer provides true choice of providers a
nd hospitals. Currently, employees’ choice of providers is limited within an employer’s health plan; change of plans requires change of providers, disrupting health care. Improved Coverage & Cost Savings of Colorado Health Services Single Payer Proposal
The Commission’s Reform Proposal sets the stage for a continued downward spiral: As premiums increase and benefits decrease, more people can no longer afford insurance and more are moved into public programs at taxpayer expense.