Robert D. Tonsing/Colorado Public News
Robert D. Tonsing/Colorado Public News
State Sen. Irene Aguilar wants Coloradans to imagine a day when 80 percent of them see their health-care costs drop.
She says the wildly different health-care system she envisions can make that happen – largely by eliminating much of what health-insurance companies do and by purchasing everyone’s medications in bulk.
The Denver doctor and Democrat is proposing that Colorado throw out the impending reforms known as Obamacare – which is permitted if the state comes up with a better plan. Last week, Aguilar introduced a resolution to ask Colorado voters to create a universal health-care system for the state.
“I want the public to understand the United States spends more money on health care than any other industrialized country in the world,” Aguilar said.
By cutting the 28 percent of spending that is wasted, her plan will cover every resident who has lived in the state at least a year.
Her plan is radically different from health care as we know it. No more paying for insurance premiums when one is without income or a job. No more sorting through confusing policies trying to figure out which one to choose. No more bills where the hospital is covered but some doctors are not. No more insurance companies with hundreds of different billing systems driving doctor and hospital staffs crazy, denying claims and driving up the cost of care.
Dr. Marc Ringel, a Weld County physician, supports Aguilar’s plan and describes the high cost of that mess of insurance paperwork in a doctor’s office.
“Our overhead is 20 percent to maintain this complicated, complicated system” for insurance billing, Ringel said.
There are at least as many people in the front of most doctors’ offices doing paperwork as in the back providing care to patients, he said.
“You can get rid of the incredible waste in our system” by cutting out the middleman, says Ivan Miller, a psychologist and president of the Colorado Foundation for Universal Health Care. The group supports Aguilar’s plan and did an economic analysis of it.
The proposal has yet to be thoroughly vetted by opponents – who could be legion given the number of people who might lose their jobs and businesses.
Specifically, Aguilar’s bill would ask voters to create a statewide health insurance co-op, owned by all Coloradans, which would replace health-insurance companies. It would offer one wide-ranging policy for all residents. It would be funded by a tax, which would replace the insurance premiums that companies and people now pay.
By slashing the 31 percent of Colorado health expenditures that now go to administration – most of it caused by insurance companies – Miller expects the cost of health care to drop by $880 per person the first year.
“We know that it would save billions of dollars,” said Lyn Gullette, a psychologist and executive director of Co-operate Colorado, the organization set up to advance the project. “We expect some business will want to move to Colorado because costs are lower.”
Employers currently spend 11.8 percent of their payroll on staff health insurance and worker’s compensation, Aguilar said.
“Our plan would ask them to pay 6 percent,” she said.
Employees would pay 3 percent of their incomes. For the average Colorado family with an income of $52,000, that would be $1,500 – far less than many are spending now, Aguilar said.
People with nonsalary income would pay 9 percent on up to $450,000 in income, Miller said. That might be steep for a successful single person or the wealthy. But for a family of four with an income of $100,000 it would amount to $9,000 a year – well below the $15,000 cost of a typical insurance policy today.
To succeed, Aguilar has to win a statewide ballot approving her plan. Such a campaign could be expected to prompt deep-pocketed insurance companies to spend millions in opposition and to stir conservative outrage about a new tax.
Sen. Kevin Lundberg, R-Berthoud, says he objects to the general concept.
“When the patient and the doctor don’t have to consider what will this cost, they choose things that cost too much,” Lundberg said. “And the overall system gets overburdened, we find we can’t afford it and the only final solution is rationing of care.”
But Aguilar is an unusual legislator. Last year, she won 9-0 approval in committee and eventual bipartisan passage of her bill that stopped hospitals from charging their highest prices to their poorest, uninsured customers. She altered the bill until she had support from both Republicans and hospitals.
Even the insurance companies are taking a gentle approach for now.
Ben Price, executive director of the Colorado Association of Health Plans, praised Aguilar’s attempts at improving the system.
“The health-care system is broken. … She’s trying to solve it. She really is,” he said.
Price said instead of worrying about Aguilar’s proposal, insurers are focused on implementing the health reforms already approved – the Affordable Care Act and the state’s new online system for buying health insurance that will be operating by this fall.
If Aguilar’s proposal becomes reality – no sooner that 2016 – “it would be difficult for the carriers to operate in the state,” Price said. But still, “we don’t want to see any of the carriers that are in the state leave because right now, we are the fourth-most competitive state in the country, and that’s a good thing,” he said.
The bill doesn’t actually ban insurance companies, and some would continue. Kaiser Permanente, for example, already also is a health-care provider. Others companies could shift their business models toward management.
The Colorado Medical Society, representing the state’s doctors, said it is “monitoring the bill closely” and communicating with the senator.
The economic study predicts Aguilar’s proposal will save $1.2 billion in the first year by purchasing all medications used in the state in bulk. Costs would be cut further by consolidating all medical records on a smartcard carried by each resident.