Colorado measure to study viability of state-based healthcare system fails in legislature, but pursuit of affordability continues
A measure by Colorado Democrats proposing to conduct a study of a statewide publicly financed or universal healthcare system with direct compensation to providers failed in this year’s legislative session, which ended on May 8th.
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House Bill 1209 called for the Colorado School of Public Health (CSPH) to administer the policy analysis and development for a publicly funded and privately delivered universal healthcare payment system alongside a state task force.
In an interview with State of Reform, one of the bill’s sponsors, Rep. Karen McCormick (D – Longmont) shared the impetus behind putting forth the measure.
“The proponents of a healthcare system that was publicly funded and privately delivered just for Colorado wanted to go to the ballot directly and put forth another ballot initiative similar to one that failed a few years ago,” McCormick said. “But that one wasn’t well set up so we were able to, through the crafting of this bill, say a referred measure to the ballot at this time is not ready. We have all these questions that we would need to be able to answer when constituents or the public asks.”
McCormick says HB 1209 was an attempt at getting answers to those questions, working with groups and advocates of a state-funded healthcare system to craft the legislation. Obtaining the necessary data through the study is important because without the information, policymakers and the public had no basis to determine whether such a system was fiscally viable.
“There were many that really just thought [Colorado] can’t afford this,” McCormick said of the bill’s failure. “[They said], ‘We can’t afford that next step so why do the first step?’ and [sponsors] had to work really hard throughout the session, at least on the House side, to help with that. And it wasn’t until the last few weeks that it dawned on us that we could have used the selling point of, ‘People are going to keep coming and asking for [universal healthcare] unless we can prove to them that it isn’t going to work.’”
The proposal intended to build on previous legislation’s annual cost estimates for a state-based universal healthcare system under three different coverage models, which ranged from $34.6 to $39.3 billion in total projected cost.
In its 2021 legislative summary, CSPH said the study found these models could increase access to care, improve health outcomes, and provide sector-specific employment benefits.
“Our cost estimates suggest that a multi-payer universal healthcare system will likely lead to small increases in the total cost of Colorado’s healthcare system,” the summary read. “Introduction of a fully publicly financed and privately delivered healthcare system could yield significant healthcare savings, particularly if pricing regulations are put in place to control cost growth in the future. The financial health of hospitals and clinics and clinician retention should all be carefully considered with any potential pricing regulations.”
Gregory Tung, CSPH associate professor and researcher in the school’s Department of Health Systems, Management, and Policy, led the previous cost analysis and presented the findings at the 2021 Colorado State of Reform Health Policy Conference.
Tung recently told the State of Reform that had HB 1209 passed, CSPH would have run more detailed cost modeling than the previous study around specifics laid out by the task force, which might have looked at funding and cost-sharing structures and broken down estimates across stakeholders.
CSPH did not take an advocacy position on HB 1209, adhering to its role as a cost analysis resource for lawmakers. But Tung said the challenges beyond cost management of establishing universal healthcare coverage and maintaining its viability are important considerations.
“It’s easy to design a system that is going to be way lower cost and shrink all the expenses,” Tung said. “You can shrink reimbursement rates and drive down the cost of everything, but hospitals and physicians are not going to be able to operate. So I think that is a huge consideration. And frankly, that is a huge challenge in thinking about pushing forward very significant reforms at the state level.”
Colorado has been a nationally prominent leader in recent years on efforts to address the high cost of healthcare, passing an affordable healthcare coverage option in 2020, establishing the Prescription Drug Affordability Board in 2021, and submitting a proposal to import cheaper prescription drugs from Canada late last year.
Rep. Mary Young (D – Greeley) told State of Reform she expects the focus on affordability and the discussions around publicly funded healthcare to continue.
“From my perspective, since there are a good number of Coloradans who continue to want [universal healthcare] to be pursued, I think that those conversations will continue to be had,” Young said. “And like any legislation, you can repeatedly bring things forward and the legislation that you’re bringing forward improves because you have that stakeholding and you can have those conversations with people.
I think the conversations aren’t going to go away as long as we continue to hear statistics that compare the outcomes and our healthcare to other countries who don’t invest as much in healthcare as we do. So we’re going to continue to explore better models until we see equity in those outcomes.”
According to the OECD’s 2022 health statistics, the US remains the only country among 38 high-income nations without universal health coverage.
Americans also have the lowest life expectancy at birth, the highest maternal and infant mortality, the highest death rates for avoidable or treatable conditions, and an obesity rate that’s nearly twice the OECD average.
The impact of COVID-19 lowered US life expectancy from 78.8 years of age in 2019 to 76.1 in 2021, marking the largest two-year drop in life expectancy in a century, according to new research by the Kaiser Family Foundation.
Meanwhile, the US spent 17.8% of its GDP on healthcare in 2021 compared to the OECD average of 9.8%.
McCormick said the intent of HB 1209 was to address some of these discrepancies in Colorado, and provide healthcare coverage to everyone in the state while reducing costs.
“We already know that the cost savings from [a universal healthcare system] would be great because we’d be getting more people to preventative care,” McCormick said. “We’d be taking care of more people with chronic healthcare issues that were utilizing their medication correctly and not splitting it in half or thirds. The [health equity] issue is huge on this piece, and the coverage of all the things that could be covered—all the things that ACA expects us to cover.
There was a question in [the legislation] that we wanted them to look at: long-term coverage for elderly folks, but also to look at it without [that provision] because we really thought that piece would be so expensive that we need to see it with and without to know if indeed there are different paths here.”
She said that the current situation is far from ideal for uninsured Coloradans using the healthcare system. McCormick says she will discuss whether to pursue the effort again next year with groups and advocates who helped craft the policy.