ObamaCare is crumbling under the weight of excessive government regulations that drive up the cost of healthcare insurance, and especially healthcare treatment, beyond the means of millions of Americans.
This statement of the reality of ObamaCare is now being accepted by nearly everyone, including many Democrats, outside the White House. This harsh reality is especially fresh in the minds of many Americans living in the state of Colorado.
Nathan Nascimento writes of this situation in The Wall Street Journal. He reminds us of the litany of failures experienced by Coloradoans since the implementation of the new healthcare law. At the end of 2013, cancellation notices went out to 335,000 customers whose plans were now considered noncompliant with ObamaCare. Nearly 200,000 cancellations will come out for the same reason at the end of this year.
The state Co-Op, called Colorado HealthOP, which was the state’s largest insurer on the ObamaCare exchange, just shut down in October. That left 80,000 members without coverage. Huge premium increases loom for the remaining exchange plans: an average of 11.7%, according to the state’s calculations.
It comes as no surprise, therefore, that many are looking for an alternative to ObamaCare. This vacuum in healthcare insurance has led many progressives to promote their favorite healthcare system – single-payer.
What is single-payer healthcare?
Single-payer healthcare systems means there is one source of payment of all healthcare expenses – the government. This is not a true socialized medicine system, where all healthcare is owned and operated by the government (like our VA system),but it has similar problems. The closest example of such a system is just north of our border in Canada.
President Obama, and other Democratic leaders such as Nancy Pelosi and Harry Reid have been on the record for years as favoring single-payer healthcare. The failures of ObamaCare, as many predicted, are now leading to a new movement to replace ObamaCare with a single-payer system.
In Colorado, after a petition supporting this idea was signed by more than 100,000 voters, the secretary of state’s office announced on November 9 that a single-payer proposal will appear on the November 2016 ballot. The proposal, called “ColoradoCare”, would replace private insurance with health care funded completely by the government, substituting higher taxes for premiums.
Setting aside the arguments against single-payer systems (and they are many!) let’s address the reality of such a proposal. This has already been tried – and failed in the state of Vermont!
In 2010, Vermont voters elected a new governor, Peter Shumlin, who ran on a platform of converting the state to single-payer healthcare. The idea was to replace ObamaCare with a state-run single-payer system, just as Colorado now proposes. To implement the system they called on famous ObamaCare architect Jonathan Gruber, MIT economist, and William Hsao, Harvard economist who developed the Medicare price controls that are driving up prices around the country.
How did it turn out?
The state spent millions of dollars in federal grants and years in planning. In order to pay for the system it would require an 11.5% payroll tax on businesses, making the total payroll tax burden nearly 20%. They also discussed a new state income tax with a top rate of 9.5%, in addition to existing income taxes that ranged from 3.55% to 8.95%. Even with these changes the single-payer system would have been in red ink by 2020 or sooner.
When this reality became apparent, Governor Shumlin announced he was abandoning single-payer last year. He remarked, “The potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.”
Coloradoans need to wake up and educate themselves to the Vermont experience. The Denver Post reports that ColoradoCare would nearly double the state budget, and that backers estimate the legislature will need to levy a 10% payroll tax to fund it. This would undoubtedly harm job growth, wage growth, and economic growth, as the governor of Vermont concluded.
Single-payer systems are not only unaffordable without devastating consequences to economic growth, but they provide unacceptable healthcare. The primary problem of all single-payer and socialized systems wherever they have been tried is rationing of care. All such systems control the costs of delivering healthcare by making people wait. By delaying healthcare, the costs are kept manageable.
But we’ve seen the real cost of delaying healthcare in our own VA system where many veterans died while waiting for appointments. This scenario is being played out in countries like Canada, Great Britain and Sweden where the waiting times to receive care have become so long the government has stepped in to allow partial privatization to handle the demand.
When other countries have already experienced the high costs and rationing of care of single-payer systems, and even states like Vermont have discovered the economic costs are too great, why would anyone want to implement such a system?