Failed Colorado universal healthcare initiative ‘a warning shot to employers’

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Although Colorado yesterday failed to pass Amendment 69, the ballot initiative that would have established a universal healthcare system in the state, the legislation reflected dissatisfaction with the existing healthcare market and is still likely to have a lasting impact nationwide, industry experts say.

“We don’t get involved in state issues, but we don’t consider this a state issue. We very much consider this a national issue,” says Joel Kopperud, vice president of government affairs at the Council of Insurance Agents & Brokers, which opposed the amendment, dubbed ColoradoCare.

“If you look at what’s happened with marijuana, Colorado seems to be a leader in a lot of social experiments. … Marijuana is on the ballot in five states in November and that’s because of Colorado’s experience,” he added. “The [marijuana] industry is blowing up. It’s a wave and it’s taking over and there’s a lot of anxiety in the [healthcare] industry that that could happen with single payer.”

Indeed, when Sen. Bernie Sanders (I-Vt.) spoke at a Boulder, Colo., rally in support of Amendment 69 in October, he emphasized the potential national implications of the amendment passing. “Colorado can send a shot that will be heard all over this country and all over the world,” he said at the time. “Because if you can pass ColoradoCare, then I guarantee you states all over this country will be following in your footsteps.”

Had Amendment 69 passed, it would have established statewide universal healthcare for all Colorado residents, funded by a $25 billion tax increase through a 10% payroll tax that would have gone into effect in full by 2019.

The “defeat will represent concerns from two levels: The costs to employers, that we’d have the highest payroll tax in the country. It would affect our ability to compete economically and attract companies here. And from employees, who are concerned about the quality of care that they receive under this proposal,” says Kelly Brough, president and CEO, Denver Metro Chamber of Commerce.

Kara Donahoe, senior account manager at Sage Benefit Advisors in Fort Collins, Colo., works primarily with small-group employers with less than 100 employees. Her clients did not express support for ColoradoCare “because the way Amendment 69 was written, it placed a lot of tax burden on small employers,” she says. “For them, this actually became a higher cost because of the way it was not only going to affect their payroll tax but also their business taxes. That was a flaw in the amendment. It caused small employers to think about what the actual cost was going to be and it was going to be quite the burden.”

Adds Andy Neary, healthcare strategist at Longmont, Colo., employee benefit brokerage VolkBell, “I think it’s a warning shot to employers: Here’s your alternative” to employer-sponsored coverage.

An ongoing conversation
Many employers have been too willing to accept the status quo of continually rising insurance rates, Neary adds, and the current healthcare system reflects that. “You get these surveys that come out from the big consulting houses that say, ‘Hey, expected cost increases are only going up 4-5% this year. Be happy about that,’” he says. “And we’ve got to stop that. We can no longer accept the status quo.”

Brough agrees that employer action will continue to improve the healthcare system. “What you’ll see us do is continue to support efforts to make sure there’s more transparency where consumers have really good information about health outcomes, the cost of various procedures, the quality of what they’re receiving,” she says. “Because we know that information allows consumers to make better decisions about healthcare and allows for a more competitive environment among our healthcare providers.”

When benefit adviser Joni Reents, president of Reents Insurance Agency in Broomfield, Colo., informed her clients of facts surrounding Amendment 69, she heard back from one employer who felt the initiative was a good idea. “He said he thought our current healthcare system is awful, the quality of healthcare that people receive is subpar — and really nothing about the legislation,” she says. “It was kind of the same concept we fought with over Obamacare that anything different is better than what we’re doing right now.”

There’s a lot to be learned from this election, Reents adds. “I think that just some of the scary parts of this legislation or the weaknesses in it, aside from it being untested — which would be the case with anything you start brand new — there were other things just not thought out well enough that left too much to chance and maybe they learn from that and they come back with better legislation in the future.”

The amendment shone a spotlight on the continuing problems in the healthcare system, says Donahoe, who doesn’t rule out a universal healthcare solution in the future, but perhaps on the national level. “Unfortunately, Amendment 69 didn’t quite have the right puzzle pieces in it. But it does definitely speak to this isn’t the end,” she says. “Will we see something like this again come across maybe at the state level, but maybe more so at the national level.”

Reents, who is president of the Colorado State Association of Health Underwriters, agrees that state-level change is less likely. Attempting to bend the healthcare cost curve is too heavy a lift for one state, she adds. “One state can’t affect the cost of healthcare enough to ever do it on their own,” she says. “But I don’t think it’s a conversation that’s going to end here.”

Meanwhile, Neary says, fixing the healthcare system is not a matter of well written legislation, but rather in the hands of employers. “If employers truly want to change their health insurance programs and reduce costs and improve benefits the only way they can make that happen is by helping their members change the way they purchase health insurance,” he says. “Thinking you’re going to change your problem by shifting gears, shifting costs onto members, that’s what got us into this mess.”

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