Many people believe Obamacare (or the Affordable Care Act) established a universal health care system like those that exist in every other industrialized country.
But even after ACA fully goes into effect, as many as 30 million Americans still might not have health insurance (out of the 50 million currently uninsured).
ACA requires all Americans to purchase private health insurance coverage, and consequently prohibits private insurers from barring someone from purchasing coverage because of a “pre-existing condition.”
But there are no cost controls. That is an enormous problem. A study in The American Journal of Medicine showed that more than half of all personal bankruptcies are due to disastrous medical bills. So there is a provision in ACA that allows a state to obtain a waiver from the federal program to create a different system.
Sen. Irene Aguilar (D-Denver) wants to use that provision to establish a Colorado Health Care Cooperative. Under this plan, Coloradans would form their own self-insurance pool to pay for the cost of medical care. Every resident of the state would be member-owners. It would be run by an elected 15-member board.
The cooperative would use a highly successful business model. More than 29,000 cooperatives can be found in every sector of the economy and in every congressional district. The majority of America’s 2 million farmers are members of the nearly 3,000 farmer-owned cooperatives. More than 7,500 credit unions provide financial services to 91 million U.S. consumers. More than 900 rural electric co-ops deliver electricity to more than 42 million people in 47 states. Some 350 million Americans hold co-op memberships.
Under Aguilar’s cooperative, employers would pay a 6 percent payroll tax for each worker, while employees would pay a 3 percent share. Currently employers and employees pay on average 11.8 percent of payroll for health insurance. Employers also pay for workers’ compensation insurance, which includes medical expenses that would be covered by the cooperative.
All Coloradans would get “platinum-level” health plans, the highest level of benefits under the ACA. Those plans would include primary and specialty care, hospitalizations, emergency visits, prescription coverage, mental health care, substance abuse treatment and some limited dental, vision and hearing benefits.
A new economic study from University of Massachusetts Amherst economist Gerald Friedman estimates Colorado would spend $4.8 billion less on health care in 2016 under the cooperative than if the state proceeded with changes under the ACA. The savings are expected to increase over time, with an estimated $10 billion in savings in 2020 and $16.8 billion in 2024.
This shouldn’t be too surprising, since under the cooperative, health care providers interact with patients directly. The private, for-profit insurance industry would no longer be a middleman. One-third of each health care dollar currently goes to “administrative costs.” Our premiums pay for Kafkaesque paperwork, obscene CEO salaries, marketing, lobbying of politicians, campaign donations and sales commissions.
According to Health Affairs, physician practices incur substantial costs in time and labor interacting with multiple insurance plans about claims, coverage and billing for patient care and prescription drugs. Physician practices spent $82,975 per physician per year. Nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans.
When Aguilar’s plan gets on the ballot, she will be attacked by a tsunami of lies and deceptions in creepy and ominous TV commercials. We need a grassroots mobilization to fight back.
Meanwhile, the Financial Times reports that U.S. retailers and restaurant chains are considering cutting working hours or paying fines rather than enrolling employees in health insurance plans mandated by Obamacare. David Dillon, CEO of the Kroger supermarket chain (which includes King Soopers), said that some firms might decide to pay a penalty for not providing insurance because it could be cheaper than the cost of coverage.
That is shortsighted. If we had a universal health care system in this state, firms would be able to spend less on health care. As a result, Colorado would be more attractive to business. Wouldn’t that be better than those stupid (and ineffective) “enterprise zones” which cut business taxes and undermine city and state budgets?
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