Chamber opposes single-payer proposal

Diane Schwenke
Diane Schwenke

Phil Castle, The Business Times

The Grand Junction Area Chamber of Commerce opposes a ballot measure that would implement a single-payer health insurance system in Colorado as a costly and risky plan that could hurt businesses and affect medical care.

The chamber hosted a meeting to outline its position on Amendment 69 and invited a hospital executive, business owner and retiree to voice their concerns.

Chamber officials also asked for help in campaigning against the measure in the upcoming election. “It’s going to take a pretty grass-roots effort to get the word out about what this really does,”  said Diane Schwenke, the president and chief executive officer of the chamber.

If approved, Amendment 69 would implement a comprehensive health care system funded by a payroll tax of 6.67 percent for employers and 3.33 percent for employees. Self-employed people would pay 10 percent of their net income. People would still choose their medical providers, but their bills would be paid by the so-called ColoradoCare system rather than private insurers. A 21-member board with elected representatives from across the state would govern the system.

Advocates of Amendment 29 contend the system could reduce health care costs by cutting the administrative costs of private insurers and buying pharmaceuticals at bulk prices.

Schwenke said the chamber opposes Amendment 69 for a number of reasons, starting with its estimated annual cost of $25 billion. “That is about the size of our entire state budget.”

The tax imposed to fund the plan would hurt existing businesses in Colorado while discouraging new businesses from operating in the state, she said.

It’s uncertain, though, if even that amount of money would be sufficient to fund the system, Schwenke said. The governing board could raise taxes by asking members of the plan to do so. The system would be exempt from government taxing and spending limits imposed under the state constitution.

The scope of coverage offered under the plan, including coverage for special conditions, also is unclear, Schwenke said. “You don’t know what you’re buying for that $25 billion.”

It’s impractical for just one state to attempt to set up a single-payer health care system when health care, Schwenke said. Because Amendment 69 would alter the state constitution, it would be difficult to change once approved, she added.

Chris Thomas, president and chief executive officer of Community Hospital in Grand Junction, said he’s concerned about Amendment 69 for a number of reasons. “We’re not fans of this.”

Thomas said he’s worried about reimbursements to health care providers under the system. Community Hospital already struggles with reimbursements under the Medicare and Medicaid programs that aren’t sufficient to cover the costs of providing care. If ColoradoCare doesn’t raise sufficient tax revenues to cover costs, one option would be to lower payments to providers, he said. Moreover, it would be difficult for the hospital to negotiate higher reimbursements with just one payer.

Given the reimbursement rates, Thomas said he’s also worried it could be challenging to retain and recruit doctors and other health care professionals if Amendment 69 passes.

The additional costs associated with  the higher payroll taxes to fund ColoradoCare also could make it more difficult financially for Community Hospital to operate, he said.

Mike Anton, chief executive officer of EmTech, an electric motor and equipment repair company based in Grand Junction, said his employee health benefits have changed over the years as costs have increased. The company used to provide full coverage at no costs to employees. But employees now have to contribute to their insurance, and that contribution has increased.

The tax to fund ColoradoCare combined with the uncertainty about the scope of coverage, makes Amendment 69 an unacceptable risk, Anton said. “For me, it just makes no sense.”

Marty Chazen, a retired executive, also said he’s concerned about the effects of the taxes imposed under Amendment 69 on businesses at a time when communities in Colorado are trying to retain and recruit businesses. “A $25 billion tax increase makes no sense.”

Chazen said he’s worried as well about the effects of Amendment 69 on retirees. Retirees with income above $24,000 could face taxes on the portion of income above that level, he said.

“It’s bad for small business, a disincentive for growth and hurts retirees,” he said.

2 Responses to "Chamber opposes single-payer proposal"

  1. Joe Rogers   April 13, 2016 at 8:28 pm

    Phil this article is a one sided piece of advocacy against amendment 69. You quote at length folks invited by the chamber to voice their opposition but only priviee a bland statement that supporters disagree. You embarrass yourself and this paper

    As for the content several retorts. First amendment 69 is budgeted to be budget neutral. This means the $25 billion isn’t new money. It’s the same amount employers and employees pay for private health insurance now. As such it can’t be bad financially for business because it won’t cost them anything more than they currently pay for coverage.

    Second retirement income of $33,000 for an individual and $64,000 for a couple is exempt from the premium tax not $24,000. That’s in the amendment Phil. But if you have retirement income above it or if an employer shifted health care costs over to their employees so that they pay less than 6.67% now then yes some will pay in more than they receive while others will benefit.

    Today we as a people have a selfishness that runs deep. So deep that any policy proposal is not measured at least in part by the greater societal good but solely based on what does it mean to me. One of the beauties of Coloradocare is that it covers everyone by requiring everyone to pay in. In this way the rising tide lifts us all.

    ColorAdocare designed by Coloradans for Coloradans. It will cover us all and save us billions. Check it out at Coloradocareco.yes

    Now that’s how you do advocacy Phil

  2. Granddaddio   April 14, 2016 at 11:44 pm

    Opponents argue we need to preserve free-market healthcare to have more choices. Hospitals, insurance and pharmaceutical companies have created a complex and confusing system. Cost is not pre disclosed, billing is complex, and networks narrow. It is complicated by design in order to keep prices hidden and profit high.

    For free markets to work price must be disclosed prior to service. I cannot think of a single example of a free market system where price is not disclosed, choices are limited, no one shops, billing is complex, and lacking competitive price disclosure prices far exceed inflation.

    When consumers do not know the price, the system is ripe for abuse. One provider in Pueblo charges $300 for a thirty minute echocardiography, a few blocks away it costs $1500 and at a hospital in Aurora, $3000. Under Obamacare, insurance companies can keep 20% above the cost of direct care. With profit tied to cost, there is no incentive for insurance companies to control costs.

    The Federal Government cannot negotiate Medicare drug prices on the free-market and abuse follows. Generic isoproterenol hydrochloride, a heart medication, recently went from $50 to $2700 overnight and prescription drug prices overall increased 55% from 2000-2013.. Since 1970, the number of physicians has doubled while healthcare administrators have increased thirty-fold and per person costs are up from $357 to $8400 per year. In twenty years Colorado health care costs are up 327% compared compared to 51% for general inflation and our mountain communities have the highest healthcare costs in America. This is not too big to fail – it is too greedy to care.

    Amendment 69 will increase taxes by 25 billion annually amending the constitution to fund healthcare for all residents of Colorado. ColoradoCare, funded by a 3.3% employee payroll tax and 6.7% employer tax. The 36.3 billion Coloradans pay for healthcare is low hanging fruit compared to the Colorado State budget at 26.3 billion or education at 6.2 billion. Currently the average Coloradan pays around $5000 in premiums and $6000 in out of pocket expenses a year. With ColoradoCare an average Coloradan will pay around $1200 a year total through payroll taxes. That kind of savings could pay the monthly rent or mortgage of many Coloradans.