The Beginner's Guide To Colorado's Universal Health Care Ballot Proposal

Jan 11, 2016

In 2016, Colorado voters will have the opportunity to weigh in on a proposal for universal single payer health care. If the ballot measure, called Initiative 20, passes, it would set up a single payer-style health care system known as ColoradoCare that would serve all the state's residents — with some exceptions. Before the debate over the measure gets too pitched, here's a few key facts about the proposal.

What's The Ballot Measure's Goal?

The goal, say supporters, is simple: offer comprehensive, high quality health care to every Colorado resident. You can read the ballot language for the initiative here [.pdf]

The Affordable Care Act, while it has expanded health care, is also still unaffordable to many Coloradans, initiative supporters say. While just 6.7 percent of Coloradans are uninsured, some may purchase health care and pay monthly premiums but decide to forego care because they can't afford their deductible. Some may find premiums are too expensive and opt out of the ACA by paying a penalty, says Democratic state Senator Irene Aguilar, a primary proponent of the ballot measure.

Aguilar claims the level of care offered by ColoradoCare will be equivalent to a "platinum" plan on existing health care exchanges.

Is This The Same As Single Payer Health Care?

Yes and no. The system is like single payer in that ColoradoCare would be the only entity negotiating with and paying doctors and hospitals for medical bills for those in the ColoradoCare system.

That's why supporters believe it can save Coloradans money. Cutting out the levels of bureaucracy (on the sides of both doctors' and hospitals and insurance companies) can cut costs. The increased negotiating power of having one insurance entity negotiating with providers can also lead to savings.

The state still wouldn't have a true single payer system, though, because other federal systems would still be around, including programs like Medicare, the Veterans Health Administration, and Indian Health Services.

A breakdown of the projected costs and cost savings from ColoradoCare.
Credit ColoradoCareYes.org

How Much Would This Program Cost?

The current price tag for ColoradoCare is $35.6 billion dollars for 2019, when it would go into effect. That's billion with a B. Out of that massive sum, nearly a third -- $11.6 billion -- would come from federal waivers and state Medicaid funds. The program is budgeted to include a $2 billion surplus in revenue. That leaves Coloradans on the hook for $26 billion.

OK, How Much Would It Cost Me?

That $26 billion the state would collect to run the program in its first year, 2019, would come from from Colorado taxpayers and employers.

Out of that amount, $25 billion would come largely in the form of payroll taxes. The tax for employees would be 3.33 percent of their wages. Employers would pay 6.67 percent of payroll. 

Nonpayroll employees would pay a 10 percent tax, some of which can be deducted, so the net tax would range between 5.5 and 7.5 percent, according to ColoradoCare.

This tax would replace the premiums you and employer currently pay. There would also be no deductibles in ColoradoCare.

The remaining $1 billion would be collected as co-pays, which ColoradoCare says would be waived for preventive care and those with financial need.

Would I Pay Less Than What I Pay Now For Health Care?

The answer, of course, depends on how much you pay now. If you are traditionally employed, you can roughly figure out how much you'd pay by plugging in 3.33 percent of your paycheck. Compare that to how much you pay now in both premiums and deductibles, since there won't be deductibles in the news system.

If you are married and you and your spouse both get benefits through one person's employer, you will both be paying the tax in the new system. If you're self-employed, your tax will be 10 percent, although some of that can be written off in federal taxes.

Would Employers Pay Less Than What They Pay Now For Health Care?

Again, that depends on the employer, how much they pay in premiums now, and how highly their employees are paid. In 2012, employers spent an average of $11,500 per employee per year, according to data from a Kaiser Survey

Average Annual Worker and Employer Contributions to Premiums and Total Premiums For Family Coverage, 1999-2012
Credit Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2012.

At a 6.67 percent payroll tax, that means employers whose average employee makes less than $172,400 a year could save money. But that's only if they currently pay close to the national average in premiums. Employers who don't currently pitch in for employee healthcare would still have to pay the 6.67 percent tax under the new plan. 

I've Heard Other Countries With Single Payer Have Long Wait Times. Would That Happen In Colorado?

When Americans hear about long wait times, they mostly hear about Canada, which does have a single payer system. But overall wait times do not seem to be correlated with the type of health care system. For example, Canada does have longer wait times than America. But here in the United States, which does not have a single payer system, there are worse wait times than the United Kingdom, which does have a single payer system.

12 Questions About Single-payer Health Care

Correction: Due to a typographical error, the original version of this story said businesses would pay 7.67 percent in payroll taxes. The actual figure is 6.67 percent. The article has been updated with the correct figure.