Study: Universal health care less costly

DENVER — A universal health-care system in Colorado would cost companies and individuals less money than the current free-market system.

That’s according to a new study produced on behalf of a group that favors such an approach and which critics say favors a government takeover of the health care system.

The study was conducted by Gerald Friedman, an economics professor at the University of Massachusetts, Amherst. It said health-care costs in Colorado would decrease by $888 per person per year if a universal health-care system was put in place.

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Denver-based nonprofit Colorado Foundation for Universal Healthcare commissioned the report.

“We said, let’s get the economic impact of these things and see what happens,´ said Ivan Miller, president of the foundation. “The numbers say loud and clear that this is a no-brainer.”

Universal health care is the model most often seen in many European countries and, depending on how it’s designed, is in part taxpayer-funded. It is often derided by Republican lawmakers and private industry groups.

State agencies are now implementing federal health-care reform rules passed in 2010 under the Affordable Care Act. One rule requires every person to have health insurance by Jan. 1, 2014 or pay penalties. Also, federal grants are being used to create the Colorado Health Exchange, an online health-insurance marketplace to help companies and individuals shop for health insurance.

A supporter of universal care and one of the founders of the Foundation for Universal Healthcare, state Sen. Irene Aguilar, D-Denver, plans to introduce a bill Feb. 22 in the state Legislature that would create the Colorado Health Care Cooperative and under which all residents would be covered in a health care plan.

The cooperative would be a nonprofit benefits administrator and payer for health-care services, acting much like an insurance company, making payments directly to health-care providers.

If Aguilar’s bill moves forward, it would go to voters for approval in 2014, and it would be implemented by 2016. But it faces huge hurdles. Two-thirds of each chamber of the Legislature would have to approve, and then a majority of voters would have to say approve it.

Business groups want the state insurance exchange, scheduled to begin enrollment this October, to be given time to expand health coverage, Loren Furman of the Colorado Association of Commerce and Industry told the Denver Post in December.

“It was a long fight to get that to a place we’d all support, and we stand by it,” Furman said.

Under Aguilar’s bill, workers choosing to participate in the cooperative would pay 3 percent of their wages and employers would pay 6 percent of each employee’s wage. Unemployed people would pay a 9 percent tax on any income they receive.

If a new universal health-care system went into effect, employee and employer contributions would be an estimated 9 percent of payroll costs vs. the current 11.8 percent average currently being contributed to employers to buy health-insurance plans right now, according to Friedman’s study.

Potential savings would come from administrative efficiencies as well as the ability of the nonprofit group or other administrator to negotiate directly with pharmaceutical companies for drugs, said Lyn Gullette, executive director of Co-operate Colorado, a nonprofit advocacy group that promotes the Colorado Health Care Cooperative.

A universal health-care system in Colorado could exist instead of the new federal health-care reform rules, or in addition to them, Gullette said.

“Under the Affordable Care Act, states can have their own systems. We’re just taking advantage of the possibility to create something that would save money,” Gullette said.

The economic report was funded with a $15,000 grant from Caring for Colorado, a nonprofit group in Colorado created in 1999 with proceeds from the sale of the Blue Cross Blue Shield of Colorado insurance company. Co-operate Colorado is funded by donations.