State residents will have a chance to change how they get their insurance coverage
Colorado residents will soon have a chance to determine how their health care in managed. Colorado’s Initiative 20, also referred to as ColoradoCare, aims to make major changes to how consumers receive their health insurance coverage, and it could have significant implications for the state’s insurance exchange. The initiative aims to establish a single-payer system, which involves the government, rather than private insurers, covering the cost of health care. While many have supported such a system, state officials have concerns regarding the overall cost.
Initiative could be a costly gamble for the state
Initiative 20 would undo the state’s health insurance exchange, replacing it with a single-payer system. Those opposing the initiative suggest that a single-payer system would be a major financial burden on the state, costing some $25 billion a year, which is approximately the size of the state’s budget. Supporters of the initiative claim that a single-payer system would make health care more available to those that need it. Senator Irene Aguilar notes that the Affordable Care Act has made health insurance more available, but Colorado has struggled to extend coverage to the under-insured. Senator Aguilar suggests that many consumers cannot handle the out-of-pocket costs associated with their insurance coverage as well as medical services.
Single-payer system creates some concerns among insurers
A single-payer system would come with a 10% premium tax on insurance coverage, which would help cover the cost of health care. This tax would be imposed on all policies that are currently in force in the state. Some private insurers have expressed doubt that a 10% increase in premiums would be adequate to cover the additional costs associated with those seeking out medical services. If the single-payer system itself were to fail, insurers suggest that it would be more difficult to transition to the old system, where the state’s health insurance exchange provided coverage.
ColoradoCare could cut down on administrative costs
The initiative would cut down on the administrative costs associated with the state’s exchange. Supporters of ColoradoCare suggest that 27% of the $2.8 trillion that is spent on health care throughout the country is spent on administrative costs. Under ColoradoCare, consumers would have no deductibles or co-pays, but deploying the initiative could come with a significant financial burden for the state.