The votes are in: Obamacare has failed.
What else is there to conclude from the 156,107 signatures of Coloradans on a petition for a single-payer, health-care system that supporters turned into the Secretary of State for validation on October 23?
Here’s the bad news for the Colorado Care campaign: Should your initiative make it on to the November 2016 ballot and pass, single-payer will fail here, too. Look to Vermont for the same reason why: Cost.
In 2010, “Single Payer” Pete Shumlin ran for governor of Vermont promising a new health-care system that would cover everyone. “During the campaign, I said single-payer is dead,” warned Scott Milne to The Christian Science Monitor. Milne narrowly lost to Shumlin in a very close election, “I’m telling you that now, and Peter Shumlin’s going to wait until after the election.”
Milne’s prescience proved correct. In December last year, Shumlin pulled the plug. “The governor’s push to make Vermont the first state with a publicly financed health care system was always contingent on finding an affordable way to pay for the plan,” editorialized the Burlington Free Press. “In announcing his decision, the governor said, ‘It became clear that the risk of economic shock is too high at this time to offer a plan I can responsibly support for passage in the legislature.’ ”
Rarely has “shock” been such an understatement. “The financing plan,” said the editorial, “called for a 11.5 percent payroll tax for employers and a 9.5 percent tax on all Vermonters. Small business owners – who would be both employer and employee – would have to pay both.”
Imagine Shumlin’s plan exported to Colorado, where small businesses employ about half or 991,542 of the state’s private workforce and make up 97.6 percent of all employers in the state, according to the U.S. Small Business Administration. Better yet, just visualize closed shops, abandoned Main Streets and decaying communities. There’s no way a small-business owner could afford single-payer health care.
Guess what? Vermont has come to Colorado. Proposed Initiative 20 also calls for taxing employers and employees, as enumerated in Subsection 9, but there’s more — much, much more. While the percentages were kept low enough for public relations purposes to make quibbling with them seem petty and churlish, the number of them astounds, and small-business owners will be levied on more than one of them.
According to economist Greg Sobetski of the Colorado Legislative Council Staff, the initiative taxes “wages, salaries, tips, dividends, interest, rents, business proprietors’ income, farm proprietors’ income, capital gains, pensions, annuities, and social security income, to the extent taxed by the state under current law.” Sobetski estimates $25 billion in new tax revenue will have been raised under the initiative’s first full year of implementation.
The price tag of Vermont’s single-payer system killed it, so backers of Colorado Care no doubt wanted a bigger bite of the apple to make sure the same fate would not befall them. But here’s the billion-dollar question: How much tax revenue can you raise from businesses that are no longer in operation and from employees no longer working?
Shumlin was back in the news recently, announcing that two years late, Vermont’s Health Connect, which was built to accommodate Obamacare, might finally be working correctly. When running for governor and campaigning for a single-payer system, he had called Vermont Health Connect a “nothing burger.”
Our state’s equivalent, Connect for Colorado, has also run less than smoothly. While small-business owners can certainly sympathize with Colorado Care wanting something different, throwing more gasoline on the grill cooking our nothing burger is not the way.
For nearly three decades, the people who care most about their employees, small-business owners, have listed the cost of health care as their biggest problem. Most of them want to provide it, but can’t afford to do so. Part of the problem is due to policymakers’ inability to invert the equation: Get costs under control and you’ll find more people covered by health care.
There are ways, such as allowing small-business owners to form greater purchasing pools for health care, including across state lines. But until now, it has all fallen on deaf ears. Obamacare has only exacerbated the problem, but maybe the coming crisis certain to be created by Colorado Care will finally get people to listen.
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