Liddick: If Obamacare is a failure in Colorado, make it too big to fail (column)
May 9, 2016
The Leftocracy running Colorado has come up with a solution to the problems posed by health care — that is, the unremitting price increases, diminishing coverages, uneven availability and in general, betrayals of the bright, shiny promises of Obamacare and its associated expansion of Medicaid.
They want to make it bigger. Much bigger.
At $38 billion, the health system proposed by Amendment 69 would have a budget roughly one and one-half times as big as Colorado's $25.7 billion budget for the entire state government this fiscal year. If it was a country, it would be the world's 48th largest economy, slightly ahead of Jordan. According to an analysis in the April 19 New York Times, the new 10-percent tax on payroll and incomes — including investments — needed to pay for the system would push Colorado's tax rates to among the highest in the nation.
If voters say yes, the system would initiate in 2019 as a start-up health cooperative bigger than companies like American Express or McDonalds. But history casts into question whether such a move is feasible in the Colorful State. Think back to the argument for implementing Medicaid expansion in Colorado: Enrollments would be relatively modest, and costs would be low. Alas, enrollment projections were underestimated by half, and costs grew from $4.5 million in 2014 to a projected $101 million in 2017. Either the original figures were a fib meant to sell the program, or the people in charge of state health-system finances are really bad at estimating future costs. Either should argue definitively against the rosy numbers in Amendment 69. It's a bill of goods, folks.
Then, consider this: The new program is to be organized as a co-operative, but history augers poorly here as well. Colorado's biggest health cooperative, Colorado HealthOP, was recently shuttered for nonperformance by the state's insurance commission, forcing more than 80,000 people to find new plans. "ColoradoCare" would be orders of magnitude larger. That, and its status as the state's monopoly health provider would make it the quintessence of "Too big to fail." And we know how that worked out.
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There are serious concerns elsewhere in the world of single-payer systems. On December 17, 2014, Vermont Gov. Peter Shumlin ended his 4-year effort to implement a single-payer health care system in Vermont. Called Green Mountain Care, the system was intended to provide universal-health coverage, replacing most private insurance in the state. The final nail in the coffin? A 2014 study by his staff and consultants predicted 1.6-percent savings over five years and foresaw required new taxes of 11.5 percent for employers and up to 9.5 percent for individuals. To recapitulate, massive tax increases, minimal savings. The governor cited these in withdrawing his plan.
And there's more.
One argument one hears constantly in the debate over medical care is that it is "too expensive," and that a single-payer system will both dramatically lower costs and expand services. This is a sign that people arguing for it are economically illiterate. Medical care is a finite good, but demand for it is potentially infinite. Or at least much larger than current suppliers can accommodate. Given that situation, there are two basic approaches to allocating this scarce resource: financial and conscious decision-making. The former we have already, and it does work: One receives the medical care one can afford. This means that some are shortchanged, although given the multitude of charitable programs offered by medical and pharmaceutical providers, that number had been shrinking for a few years despite the occasional tabloid agony story.
The other method is to ration care through human intervention. Amendment 69 proposes a 21-person board of directors, and do not doubt: Establishing a formulary for rationing health care will be among their first tasks. Like it or not, when a small group of people decides that an 81-year-old dad with congestive heart failure will receive palliative care only until the inevitable happens, regardless of other factors, we have a "death panel." This is an easily predictable outcome of "ColoradoCare." Just accept it.
None of which is to say that the current state of health care in Colorado is ideal. There are gaps. Very high-priced areas. Under-served regions. But listening to what variations in price and availability tell us, then taking steps to address those failings in detail would provide a far better result than more than doubling the state's budget and sticking the productive classes with the bill — all to achieve results, which will be both worse and dearer. So in spite of the Left's itch to inflate the government on the dubious argument that people are cleverer than markets, do not be deceived.
Bigger is not always better. Or even as good.
Morgan Liddick writes a weekly column for the Summit Daily News.
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