Biggest barrier to affordable health insurance options? Colorado’s constitutional tax code
By Rayna Hetlage
Colorado made some big strides over the last decade when it comes to creating ways to make sure everyone, regardless of their income, can take care of their health by seeing a doctor for preventative care or when they’re sick. In the past few years, a historically high number of Coloradans have health insurance—either through their employer, through an individual plan purchased on the state health insurance exchange subsidized by federal tax dollars, or through the state’s expansion of Medicaid thanks to the Affordable Care Act (ACA). Despite these successes, there is still a long way to go before every Coloradan gets the health care they need. As of 2019 more than 370,000 people—about 6.5 percent of Coloradans—still lack health insurance according to the Colorado Health Institute.
On November 15th, 2019 the Colorado Department of Healthcare Policy and Financing (HCPF) and the Colorado Division of Insurance (DOI) announced another way to help Coloradans find the right health insurance option when they unveiled their long-awaited state public option proposal. The proposed option has many features the Colorado Fiscal Institute believes will benefit Coloradans who earn low incomes: standardized plans, certain services provided before patients’ deductibles are met, and the inclusion of all Colorado residents all deserve to be lauded. Though these are real wins for the health of Coloradans, CFI was disappointed to see that the final plan did not thoroughly explore the potential impacts of creating a Medicaid buy-in option, despite the final report mentioning that the legislation can explore this as an alternative.
The reasoning given for not considering a Medicaid buy-in more thoroughly was concern over how the state would generate the initial funds to create such a program. In many other countries, governments are able to fund public health insurance through taxes and all residents share in the benefits and responsibilities of funding health care to create a healthier, more equitable society. Unfortunately, Colorado’s TABOR law—which locks our tax code into the state constitution, making it difficult to update—prevents state elected officials from raising the revenue required to create a Medicaid buy-in program without a contentious, costly election campaign or creating an enterprise, thereby adding more complexity to our government.
Colorado isn’t alone in seeking options outside of the plans currently allowed under federal law: 19 other states have introduced or passed legislation to implement or study such a policy solution. In Washington state, lawmakers passed a plan similar to the one Colorado is considering.
The actuarial analysis of Colorado’s proposed option estimates the plan will cover an additional 4,600-9,200 Coloradans within the first year. This is a positive step forward, but it still leaves hundreds of thousands of Coloradans without health insurance. While we do not know how a Medicaid buy-in program would increase the number of Coloradans with health insurance, our legislators are still unable to fully explore it as an alternative or addition to the proposed state option. Without the ability to raise revenue easily, Colorado has its hands tied once again by our constitutional tax code. That leaves lawmakers able to decide only between offering the current option or waiting until the federal government acts to provide more options for everyone in the country.
It will be important for Coloradans to pay attention to how well this plan works. If it does end up lowering costs and expanding health care access, more people may end up signing up. However, if this plan only ends up being a choice for a tiny percentage of people who still can’t afford to see a doctor, afford medication, and access other health services that give them opportunities to live long and healthy lives, it will be important for everyone to know the reason why solutions are so limited starts and ends with TABOR.
