Colorado's universal coverage plan: questions and answers

Colorado voters will decide on universal coverage in November

Frequently asked questions about ColoradoCare universal coverage initiative
Voters in Colorado have almost 10 months to decide whether they like the ColoradoCare universal coverage initiative. Portra Images/Taxi/Getty Images

In November 2016, Colorado voters will be tasked with decided the future of the state's health insurance system. Not surprisingly, there are a lot of questions about what's being proposed under ColoradoCare - both within Colorado and from people in other states who are watching the debate unfold. 

This post from Physicians for a National Health Program (PNHP) is an interesting look at ColoradoCare's pros and cons.

PNHP notes that ColoradoCare would not technically be a single-payer system, because some Colorado residents would continue to be covered by federal health programs (Medicare, VA, Tricare, and Indiana Health Services). That would be the case anywhere unless a single-payer system were to be implemented on a national level, since there's no mechanism for states to use a waiver in order to obtain the funds that would otherwise have been used for those programs (there way there is for Medicaid, for example, by using a 1115 waiver).

Vermont's Failed Attempt at Single Payer

Vermont was on track to use a 1332 waiver to implement single payer healthcare starting in 2017, but pulled the plug in December 2014). Colorado State Senator Irene Aguilar is is spearheading the ColoradoCare initiative. According to Sen. Aguilar, ColoradoCare has some advantages that Vermont's single payer initiative didn't have:

  • Vermont already had a robust healthcare system, including state-funded coverage for all adults with income up to 150% of the poverty level - long before the ACA came along. The uninsured rate in Vermont was much lower than the national average, and the impact of the ACA hasn't been as significant in Vermont as it has been in other states like Colorado. ColoradoCare (and Vermont's doomed single payer system) relies on a 1332 waiver to generate some of the funding necessary to run the program - in the case of ColoradoCare, the federal government will contribute almost a third of the cost. This money comes from funding that would otherwise have been spent by the federal government to fund healthcare in Colorado via Medicaid, premium subsidies, cost-sharing reductions, and small business tax credits. In the case of Vermont, it appears that they may have overestimated how much they were going to get from the federal government with their 1332 waiver. Essentially, the more impact the ACA has on a state, the more money is up for grabs with a 1332 waiver.
  • Adding to that point, Colorado's single payer proposal is a couple years behind Vermont's (if approved by voters, Colorado's program is slated to begin in 2019, as opposed to 2017). That means Colorado has been able to gather real data in terms of how much federal money is flowing into the state under the ACA in the form of Medicaid dollars, premium subsidies, cost-sharing subsidies, and small business tax credits. All of that money would instead be directed to ColoradoCare under a 1332 waiver. By delaying implementation, Colorado has access to actual data in terms of the federal funding available. Vermont's initial calculations were all projections, since they outlined their program before the bulk of the ACA's implementation began.
  • Aguilar noted that ColoradoCare's creators started with the cost and used that to model what could be done realistically in Colorado. In Vermont, the official cost projections that were generated in late 2014 (just before the state abandoned their single payer plan) came long after the details of the single payer program had been developed. Ultimately, it turned out that they couldn't afford to fund the program they had designed.
  • Aguilar also pointed out that Colorado is somewhat geographically isolated when compared with states like Vermont. Colorado is surrounded by states with relatively sparse populations. Someone who has a job in a city in a neighboring state isn't likely to move to Colorado to get healthcare benefits and continue to commute to their job, because there simply aren't that many major population centers in neighboring states within striking distance of Colorado's borders. The relative isolation of Colorado residents means the state has less interstate commerce when it comes to its health care system than a smaller state in the northeast that's bordered by major population centers like New York and Massachusetts.

ColoradoCare and Seniors

Everyone in the state would be covered under ColoradoCare, although seniors would still have Medicare as their primary coverage. Medicare beneficiaries would still be responsible for paying for Medicare Part B (outpatient care) and Part D (prescriptions), unless they're dual-eligible for Medicare and Medicaid (for current dual eligibles, Medicaid coverage can be provided in addition to Medicare, or, depending on income, Medicaid funds can be used to pay Medicare Part B and D premiums).

The fact that seniors with taxable income will have to pay the ColoradoCare premium tax has been touted as a talking point against ColoradoCare, but those seniors would no longer have to purchase Medigap coverage because ColoradoCare would function as their Medicare supplement. The average Medigap premium in Colorado in 2015 was $181/month, so comprehensive Medicare supplemental coverage in trade for the ColoradoCare premium tax is not an insignificant benefit.

What about out-of-state travel?

ColoradoCare would be like an HMO in terms of coverage outside the state; emergency care would be covered outside the state, but Colorado residents would need to obtain routine care within Colorado in order to have it paid for by ColoradoCare.

Sources:

Colorado Care, How It Will Work.Prepared by ColoradoCareYes. Accessed 12/28/2015.

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