Thursday, August 23, 2007

How scary is this?

At today's 208 Commission, the Lewin Group presented its final economic modeling results of the four selected health care proposals. After changing various assumptions and doing other bits of "tweaking," the results are as follows:

The Better Health for Colorado proposal has no mandate, but will expand Medicaid/SCHIP and provide premium subsidies for lower income families who do not qualify for Medicaid. It would have an Exchange, a quasi-public administrator. This plan would have a core benefit package with an annual maximum of $35,000. Employers would be mandated to cooperate with payroll withholding and work site enrollment, but would not be required to purchase insurance for their employees. This proposal would cost the state approximately $1 billion in new costs and would be funded by additional tobacco taxes with an increase from 84 cents a pack to $2.00 a pack, and an increase in the alcohol tax, from an increase of 10 cents per six-pack on beer, to an increase of 59 cents per liter of wine, to an increase of $5.03 per liter of spirits -- gin, vodka, etc.

Healthy Solutions for Colorado mandates that every Colorado resident of six months or more file proof of health insurance on their state income tax return and at the DMV when they renew their drivers' license or buy tags for their cars. Any person not having proof of health insurance would be denied any vehicle registration and their driver's license plus incur a fine or income tax penalty of $500 per person. There would be subsidies for lower income families. Under the most recent Lewin documents, an individual earning $29,400 would have to pay at least $2,200 per year for the "Core Limited Benefit Plan" or pay a penalty and lose their driver's license. This does not include the copays and the 80% coinsurance payments if they actually use their policy to obtain lab work, x-rays or outpatient surgery. This proposal limits those receiving Core benefits to a maximum of $50,000 per year, and has many other limitations on benefits. This proposal, with a Connector type exchange, "a public/private" administrator, is financed by a nutrition sales tax on all consumable food items with little or no nutritional value (who decides?) including 2 to 5% sales tax on fountain sodas and walk-up coffee locations AND the same increase in alcohol and tobacco taxes as in the Better Health Plan. It would cost the state an additional $1.36 billion dollars.

A Plan for Covering Coloradoans has both individual and employer mandates. Individuals would be required to file proof of health insurance with their income tax return or face an unspecified penalty. Employers would have to offer health insurance to employees or pay an assessment to the state. This expands the Medicaid population to include the elderly and the disable, non-disabled adults and parents of eligible children. All other persons would purchase insurance through a purchasing pool which combines all markets, and all living in the same geographic area would pay the same rate regardless of age. The young and healthy would pay the same as the sick and older. Premium subsidies would be available for families up to 400% of the federal poverty level (about $80,000 for a family of 4). There would be 2 standard plans in the pool, plus two additional plans for those not receiving subsidies. This would be financed by a premium tax on insurers, the employer assessment of $347 per worker, and the alcohol and tobacco taxes identified above. In addition, this plan considers an increase in the income tax and/or property and sales taxes. This plan would cost the state an additional $3 billion dollars.

Colorado Health Services Single Payer Plan -- Eliminates insurance and insurance companies in the state and provides benefits equal to Colorado Medicaid and routine dental visits to all Colorado residents of 3 months or longer. This would cost the state $26.6 billion dollars which does not include another $3 billion of medical services, for example, optician visits, optional eye surgeries (e.g. Lasik), cosmetic treatments and surgeries, and other medical treatments that are not included in Medicaid benefits. The total cost of forcing every one of Colorado's 4.6 million residents into this government health plan would be about $29.6 billion. Lewin's documents say this plan would save the entire population of Colorado $3.5 billion in medical costs, but their documents don't include the $3 billion for medical expenses not paid by insurance, but which was disclosed at today's meeting. To fund this massive program which includes a new medical bureaucracy, Lewin assumed a 6% employer tax on payroll and an increase in the state income tax of 8.1% for a total personal state income tax rate of 12.73% AND an increase in alcohol and tobacco taxes as described in the other plans above.

In addition, the Commission had further discussion on its 5th proposal, which is still in the making. At this point, it will probably have an individual mandate with enforcement provisions, subsidies, and will look very much like one or more of the above four proposals.

There is really nothing new in any of these proposals, just the same tired demands for more government control of medicine and health insurance. There is no reform, just more and more government involvement and control. The scary part is that these commissioners are ignoring the very health care professionals they are counting on to provide these services, viewing the taxpayer-consumer as simply the conduit for more money, and treating the government as if it had rights and the people had none.

Where is the original, fresh, new orientation -- to get people out of and away from government programs that promote dependence and fail to promote accountability? Where is there an attempt to find out why people don't purchase insurance and find ways to encourage its purchase instead of using government force? Where is a plan that treats individuals as owning their bodies and their funds, that treats doctors as owning their practices, and that treats insurance companies as owning their policies? The only plan that provided these and other fresh alternatives, the FAIR plan by Brian Schwartz, which can be found at was discarded by the Commission as not easily modeled. Of course not. When the modeling is all about more government, it's difficult to imagine how to model less government intrusion.

Scary, indeed.