April 13, 2013
State Sen. Irene Aguilar pulled her own bill that would have substituted a payroll tax for health insurance because it didn’t have enough support to pass on the required two-thirds vote.
Aguilar said the proposal would have cut healthcare costs substantially, through group purchase of prescriptions and by largely eliminating the role health insurance companies.
Aguilar, a Democrat from Denver, needed a two-thirds vote in each house in order to get her proposal on the November ballot.
She is still pushing a bill to form a committee that would study options for affordable healthcare covering everyone in the state. The committee would meet over the summer and fall, between legislative sessions.
UPDATE: Universal plan passes committee; would slash Colorado healthcare costs
by Ann Imse and Rabah Kamal
Updated April 5, 2013
State Sen. Irene Aguilar’s proposal to substitute a payroll tax for health insurance premiums passed out of the Senate Health and Human Services Committee on a 4-3 vote Thursday, after receiving a positive fiscal note.
Fiscal notes, produced by legislative staff, often doom bills if they project that a proposal will cost the cash-strapped Colorado state government money. This time, the fiscal note projected Colorado would save $109 million, largely because insurance for state employees would cost less.
Aguilar said the plan, which would have to be approved by voters, would save Coloradans money on health care by mass purchase of pharmaceuticals at a discount, and by eliminating most of what health insurance companies do.
The fiscal note also says the new taxes would amount to $16 billion a year. The taxes of 6 percent of payroll for employers and 3 percent of salaries for employees would replace health insurance premiums, which cost more.
Colorado will see 25,900 new jobs under the proposal, offsetting 15,000 jobs that would be lost, according to testimony by supporter Dr. Ivan Miller, president of the Colorado Foundation for Universal Health Care.
Aguilar raisied her concern for the hundreds of thousands of Coloradans who won’t be covered even under the Affordable Care Act, now going into effect. “Who will be paying for those other people who do need health care? Are we as a society willing to make sure that those people are living humanely or not?”
Despite amicable debate, Republican State Sens. Kevin Lundberg and Larry Crowder were skeptical.
“If this is a better way, I’d go for it,” said Crowder. But he added that he is not sure it would cost Colorado less than the Affordable Care Act.
“There might be a nugget of truth here that we can find together,” said Lundberg, “but I don’t know that it’s in this measure.”
The committee vote broke on party lines with Democrats like Aguilar in favor and Republicans opposed. The proposal now goes to the Senate floor. It needs a two-thirds vote in each house to authorize a vote of the people. If that fails, supporters plan a petition drive to get on the ballot.
Universal plan would slash Colorado healthcare costs
March 31, 2013
by Ann Imse
Colorado Public News
State Sen. Irene Aguilar wants Coloradans to imagine a day when 80 percent of them see their health care costs drop.
She says the wildly different healthcare system she envisions can make that happen – largely by eliminating much of what health insurance companies do, and by purchasing everyone’s medications in bulk.
The Denver doctor and Democrat is proposing that Colorado throw out the impending reforms know as Obamacare – which is permitted if the state comes up with a better plan. This week [pdf] Aguilar introduced a resolution to ask Colorado voters to create a universal healthcare system for the state.
“I want the public to understand the United States spends more money on healthcare than any other industrialized country in the world,” Aguilar said. By cutting the 28 percent of spending that is wasted, her plan will cover every resident who’s lived in the state at least a year.
Her plan is radically different from healthcare as we know it. No more paying for insurance premiums when one is without income or a job. No more sorting through confusing policies trying to figure out which one to choose. No more bills where the hospital is covered but some doctors are not. No more insurance companies with hundreds of different billing systems driving doctor and hospital staffs crazy, denying claims, and driving up the cost of care.
Dr. Marc Ringel, a Weld County physician, supports Aguilar’s plan and describes the high cost of that mess of insurance paperwork in a doctor’s office.
“Our overhead is 20 percent to maintain this complicated, complicated system” for insurance billing, Ringel said. There are at least as many people in the front of most doctors’ offices doing paperwork as in the back providing care to patients, he said.
“You can get rid of the incredible waste in our system,” by cutting out the middleman, agrees Ivan Miller, a psychologist and president of the Colorado Foundation for Universal Health Care. The group supports Aguilar’s plan and did an economic analysis of it.
The proposal has yet to be thoroughly vetted by opponents – who could be legion given the number of people who might lose their jobs and businesses.
Specifically, Aguilar’s bill would ask voters to create a statewide health insurance co-op, owned by all Coloradans, which would replace health insurance companies. It would offer one wide-ranging policy for all residents. It would be funded by a tax, which would replace the insurance premiums that companies and people now pay.
By slashing the 31 percent of Colorado health expenditures that now go to administration – most of it caused by insurance companies – Miller expects the cost of healthcare to drop by $880 per person the first year.
“We know that it would save billions of dollars,” said Lyn Gullette, a psychologist and executive director of Co-operate Colorado, the organization set up to advance the project. “We expect some business will want to move to Colorado because costs are lower.”
Employers currently spent 11.8 percent of their payroll on staff health insurance and worker’s compensation, Aguilar said. “Our plan would ask them to pay 6 percent,” she said.
Employees would pay 3 percent of their incomes. For the average Colorado family with an income of $52,000, that would be $1,500 – far less than many are spending now, Aguilar said.
People with non-salary income would pay 9 percent on up to $450,000 in income, Miller explained. That might be steep for a successful single person or the wealthy. But for a family of four with an income of $100,000 it would amount to $9,000 a year – well below the $15,000 cost of a typical insurance policy today.
To succeed, Aguilar has to win a statewide ballot approving her plan. Such a campaign could be expected to prompt deep-pocketed insurance companies to spend millions in opposition, and to stir conservative outrage over a new tax.
Sen. Kevin Lundberg, R-Berthoud, says he objects to the general concept.
“When the patient and the doctor don’t have to consider what will this cost, they choose things that cost too much,” Lundberg said. “And the overall system gets overburdened, we find we can’t afford it and the only final solution is rationing of care.”
But Aguilar is an unusual legislator. Last year, she won 9-0 approval in committee and eventual bipartisan passage of her bill that stopped hospitals from charging their highest prices to their poorest, uninsured customers. She altered the bill until she had support from both Republicans and hospitals.
Even the insurance companies are taking a gentle approach for now. Ben Price, executive director of the Colorado Association of Health Plans, praised Aguilar’s attempts at improving the system. “The healthcare system is broken … She’s trying to solve it. She really is,” he said.
Price said that instead of worrying about Aguilar’s proposal, insurers are focused on implementing the health reforms already approved – the Affordable Care Act and the state’s new online system for buying health insurance that will be operating by this fall.
If Aguilar’s proposal becomes reality – no sooner that 2016 – “it would be difficult for the carriers to operate in the state,” Price said. But still, “we don’t want to see any of the carriers that are in the state leave, because right now we are the fourth-most competitive state in the country, and that’s a good thing,” Price said.
The bill doesn’t actually ban insurance companies, and some would continue. Kaiser Permanente, for example, is already also a healthcare provider. Others companies could shift their business models toward management.
The Colorado Medical Society, representing the state’s doctors, said it is “monitoring the bill closely” and communicating with the senator.
The economic study predicts Aguilar’s proposal will save $1.2 billion in the first year by purchasing all medications used in the state in bulk. Costs would be cut further by consolidating all medical records on a smartcard carried by each resident.
Miller likened the current healthcare system to a state where people are allowed to drive only on the highways built by their own highway provider.
“The state would be covered with asphalt” and the cost would be enormous, he said. Aguilar’s proposal is similar to a single publicly funded system of highways, he said.
Aguilar doesn’t know if she’ll find a single Republican co-sponsor, but said, “I’m hopeful for a vote or two” from among GOP legislators to agree to put the question to the voters. She is hoping to get the proposal on the ballot this fall.
“But I know that frequently, things that are very dramatically different take a few years to make them happen,” she said. “So if not (this year), this will get me one step closer than I would be without it.”