The URL can be used to link to this page

Home My Public Portal AboutTBP 2016-05-04PINNl1C©L 7501 E, Lowry Blvd. / Denver, 0080230 ASSURANCE 303.361.4000 / 800.873.7242 pinnacol.com Amendment 69 is Bad for the Workers' Compensation System and Injured Workers Overview of Amendment 69 Amendment 69, otherwise known as ColoradoCare, would establish a single -payer health care system in Colorado by amending the state constitution. The system would be paid for in 2 ways: • A waiver from the federal government that would redirect federal funds from Medicaid to ColoradoCare • Tax increases as follows: 0 3.33% payroll tax on employees 0 6.67% payroll tax on employers 0 10% "healthcare premium tax" on non -payroll income Overall, this would amount to a $25 billion tax increase for the state, approximately doubling the size of Colorado's budget. The system would be governed by a 21 -person elected board, though start-up functions would be overseen by a 15 -member board appointed by the governor and legislative leadership. Private insurance and Medicaid would go away; Medicare would still apply, and Colorado residents could sign up for a ColoradoCare-sponsored Medicare Advantage or Part D plan. ColoradoCare would pay health care providers directly. Colorado residents would pay no copays for preventive and primary care, and no deductibles. Arguments for • This streamlined approach will save significant money over time by eliminating administrative costs. • Patients will have access to any primary care provider they wish. • Benefits will be consistent and predictable. • Employers will be spared the hassle of dealing with employee health benefits. • Employers will save money on workers' compensation. Arguments against • Costly — will essentially double the size of the current state budget. • Hits business owners and sole proprietors disproportionally, because they will pay both sides (employer and employee) of the payroll tax. • Unaccountable — will operate outside state government and TABOR limitations. • Will make Colorado less attractive to health care providers and businesses. • Will be embedded in the state constitution, making it extremely hard to amend or repeal. Amendment 69 and Workers' Comp Amendment 69 would require the General Assembly to repeal or amend the Workers' Compensation Act and any other laws: (1) concerning the provision of medical care for workers who suffer work-related injuries or illnesses, (2) concerning the payment of premiums for medical benefits covered under the Workers' Compensation Act, and (3) that would otherwise conflict with Amendment 69. The adverse impact on the workers' compensation system and injured workers from Amendment 69 cannot be underestimated. • Because the health care portion of workers' comp would be paid through the ColoradoCare system, workers' compensation carriers will be responsible for the indemnity (lost wages) portion. Amendment 69's backers claim this would reduce employers' workers' comp costs by 59 percent However, the savings they project would be eroded quickly by a loss of worker productivity and an increase in indemnity costs. ColoradoCare won't have mechanisms in place to do all the things that a carrier such as Pinnacol does: work with employers to keep workers safe and minimize the potential for injury, and work with physicians to ensure injured workers get back to work in a timely and safe way. As a result, workers may be away from their jobs longer, and wage replacement costs for employers will increase. • Because workers' comp will now amount to only wage replacement, carriers will likely leave the state — an indemnity -only business where there is no control over the cost of care is not a recipe for success. Jobs will be lost throughout the sector; indeed, proponents of Amendment 69 themselves acknowledge that "the insurance industry would undergo a substantial loss of jobs and income in its health care and workers' compensation sector." • Under Amendment 69, "beneficiaries" would be allowed to choose their own primary care providers. This dismissal of the current requirement that injured workers receive treatment by appropriately accredited physicians, using medical treatment guidelines that have been specially developed for occupational medicine, constitutes a disservice to injured workers and their employers. • Based on the definitions provided in Amendment 69, injured workers who reside outside of Colorado or receive medical care from providers not licensed in Colorado may still need to obtain medical benefits through workers' compensation. This could create an incentive for other workers' compensation insurers to transport out-of-state injured workers back to Colorado for medical treatment to avoid paying for out-of-state medical care. 2 Financial Sustainability Compared to the current system, ColoradoCare savings will increase over time. Dr. Friedman's economic analysis of ColoradoCare (Friedman, 2013) was based on the assumption that on Day One of paying for health care services there would be limited expense reduction or savings, but expense reductions would increase and accumulate over time. The majority of the savings or expense reduction comes from administrative costs. The dynamic savings are savings that come from payment reforms, which take time to develop. Except for the expense reductions forecast to come from removing private insurance administrative costs and some government administration, the other savings would increase as ColoradoCare matured. Over time: The ColoradoCare savings or reduced expenses compared to the current system 30% 25% — 20% 15% 10% 5% no/ - 2016 2017 2018 2019 2020 2021 2022 2023 2024 Dynamic Savings Government Administration Fraud Reduction Drug and Medical Device Pricing ■ Administration: Private Insurance (Friedman, 2013, p. 13) Premiums can be adjusted if necessary. Dr. Friedman projects that after the savings mature, the Colorado medical inflation will exceed the Consumer Price Index (CPI) by 1.5%. This is much less than the 4+% average rate by which U.S. medical inflation has exceeded CPI inflation between 2008-2012 (Martin et al., 2014). Even though the rate of increase would be less than the current system, due to advances in health care, all analyses and predictions indicate that health care expenses will continue to increase. If needed to maintain comprehensive and quality coverage, the Initiative allows ColoradoCare to request that the members vote to approve a premium increase. Are the Large Savings Possible? Waste in U.S. Health Care System Missed Prevent Opportunities $55 billion Fraud - $75 billion Excess Administrati. costs $190 billion Prices ThatAre Too High $105 billion Unnecessary Services $210 billion U.S. Health Care Annual Waste $ 765 Billion (Instdute of Medicine, 2012) Inefficiently Delivered Services $130 billion The Institute of Medicine estimates that on a national basis, 27% of health care expenditures, $765 billion in 2012, are unnecessary and avoidable (Institute of Medicine, 2013) Growth of Physicians and Administrators 3000% 0 1\ 2500% v 2000% C&O 1500% O 1000% C7 500% 0L. 1970 1980 1990 2000 2010 =Physicians =Administrators Between 1970 and 2010, the number of U.S. physicians has increased about 200% while the number of administrators has increased about 3,300% (Hitrlmelstein & Woolhandler, 2012). Administrative complexity continues to grow with the Affordable Care Act. The administrative complexity is not only wasteful, but also can impair efficient treatment. The largest savings in ColoradoCare comes from eliminating this unnecessary expense. ColoradoCare Revenue Figures are for sample year 2019 (Miller, 2015) Based on the "Economic Analysis of the ColoradoCare Proposal, Including addendum with 2019 projections" prepared for the Colorado Foundation for Universal Health Care, Miller 2015s. Department of Revenue collects premiums and forwards fiords to ColoradoCare. �_ Ongoing ACA and Medicaid waiver funds are forwarded though the Colorado state government to ColoradoCare. *This estimate is for example year 2019, the ballot initiative uses example year 2019 for which the revenue estimate is $25 billion. $25.0 billion* from Health Care Premium Tax $11.6 billion from federal waivers and state Medicaid $1.0 billion $37.6 billion total revenue -$35.6 billion needed to cover ColoradoCare expenses $2,0 billion surplus balance PatientsExperience with ColoradoCare Choice of primary care provider at any time Assurance of affordable, lifetime health care regardless of changes in employment, marital or financial status Freedom from deductibles Assurance that the provider will not need to take time from patient care to deal with insurance issues Ability to easily keep and access full medical records What's new with through a Smart Card ColoradoCare? Comprehensive coverage including: Full mental health and substance abuse treatment, which is not placed in a separate, segregated system Access to quality and outcome data about providers and Colorado hospitals Employers not involved in health care decisions Provider appointments Possible restrictions on specialists to those who have a What's the same with working relationship with the chosen primary care provider ColoradoCare? The ability to receive treatment from licensed providers in Colorado Patient responsibility for healthy behavior Time wasted discussing insurance issues with providers Hidden policy restrictions — the policies of What's removed with ColoradoCare would be transparent and readily available ColoradoCare? Deductibles and financial barriers to health care Need to change providers when health care insurance plan changes Accessing Care in ColoradoCare Routine pplications for enrollment would be readily- available on line and throughout the community. Filing a Colorado Income Tax form would be evidence of residency. Similar programs, such as Medicaid and the ACA, accept a rent receipt or similar documents as proof of residency: Urgent Urgent enrollment would be available by phone or Internet from any provider's office, urgent care center, or emergency room. Phone or Internet confirmation of enrollment if card is not available. ColoradoCare Lifetime Medical Benefits Card Your name: i 1 Your patient >D#: After development of Smart Card and medical database ach beneficiary would receive a Smart Card containL g the persons passcode-protected medical record and allowing access to full medical records. No deductibles Preventive care: $0 co -pay Co -pays waived for Primary care: $0 co -pay those in financial need Health Care Premiums HEALTH CARE PREMIUM TAXES Regular Health Care Premium Taxes begin when ColoradoCare begins paying the health care bills. • Employees pay a Hea'_trz Care Premium Tax of 3.3396 of gross pay. • Employers pad- a Health Care Premium Tax of 6.67% of payroll. Those earning non -payroll income pay- a Health Care Premium Tax of 10% excluding: Unemployment insurance, alimony-, Social Security, and some pension income up to $33,000 annually for indh idual income tax filers and $60,000 annually- for joint income tax filers Income over $350,000 for individual filers and $450,000 for joint filers. The impact of the Premium. Tax on non payroll Income is lower than 1090 because the Premium Tax is a state tax, and :herefore it becomes a deductible expense on both federal and state taxes. Considering the reduction of income tax, the impact of the 10% Premium Tax is between 5.57 016 and 8.537% depending on which tax bracket a person is in. HEALTH CARE TRANSITIONAL OPERATING FUND TAXES (Collected in the years ColoradoCare is preparing to pay- health care bills) Employees pay a Transitional Operating Fund tax of 0.3°6 of gross pay. Employers pay a Transitional Operating Fuad tax of 0.6% of payroll.. Earners of non -payroll l income pay a Transitional Operating Fund tax of 0.9% excluding: Unemploy-ment insurance, alimony; Social Security, and some pension income up to $33,000 annually for hidiv-idual income tax filers and 560,000 annually for joint income tax filers Income over $350,000 for individual filers and $450,000 for joint filers. HEALTH CARE PREMIUM TAX PRINCIPLES Everyone should par- according to ability. The rate is 10% for even -one, and employers share an employees costs by payir_g 6.67% of the 10% from the wage and benefit package, leaving employees responsible for 3.33%. Premiums must provide for sustainable, comprehensive, high qualiq; and accessible, health care coverage. Medicare and Social Security are insurance programs that provide models for a successful payroll premium collection system. People ultl* non -payroll income need to pay as well as wage earners. A simple system saves administrative costs and can be the most fair. k !4� m 1` Providers' Experience with ColoradoCare Administrative simplicity in dealing with one payer instead of 450 insurance companies (Colorado Division of Insurance, 2014) A local, accessible system A Provider Ombudsman Office Assurance that all patients will have adequate health care coverage, eliminating the need to shift cost from what's new with low-paying to high -paying patients ColoradoCare? More time for patient care and the provider/patient relationship due to less paperwork Clarity about covered benefits Support and incentives for quality care Easy access, with patient permission, to essential medical records for all providers Provider compensation remains competitive with other states Established standards for medical care and the What's the same with existing provider infrastructure ColoradoCare? The current private practice, health care delivery system Provider compensation for both for-profit and not-for-profit practice models as well as both independent and incorporated practice models Hundreds of insurance companies that have different policies What's removed with Unpredictable benefit restrictions as benefits would ColoradoCare? be clearly described online Having patient load and provider/patient relationships disrupted by changes in health care insurance plans Employers' Experience with ColoradoCare Additional payroll withholding and premium tax pa} -:rents. wh'ch are similar to FICA in simplicity A decrease in employee health care costs for employers who previous:y provided health care. IV -hat's new with A decrease of 59% in workers' compensation costs ColoradoCare? Predictable health care costs Health care coverage for employees, wvners, and their families regardless of number of hours `worked Workers' compensation insurance for serious disability What's the same with and loss of i+ -ages due to work related injuries ColoradoCare? Additional benefits provided by employer such as life insurance, retirement plans, etc. Employer responsibility and administrative expense for employee health care, which ir_voived p,irchasing health care, managing health care benefits, and communicating the benefits to employees What's removed with _llanagirg workers' compensation healthcare benefits ColoradoCare? Unpredictable cost increases Regulator- complexity Involvement in employee medical finances Large cost increases when a significant part of workforce develops high cost conditions '11':t3� �.. el. :.T.:_.:.�r iaL..:�yj — — Complementary, Alternative, and Integrative Medicine Many Coloradans want to know if ColoradoCare v-ould pay for alternative, complementary or integrative health care approaches. How do these types of health care fit into ColoradoCare? he complementary and integrative health care communities promote caring for the whole person—mind, body, and spirit. They integrate conventional treatments Nrit:: non -mainstream approaches that may include nutrition, supplements, Eastern medicine, and spiritual approaches. Their focus on outcomes and `v ellness is consistent E%•ith ColoradoCare's focus on quality, value, and health outcomes. Patients, nrov dens and health care systems are increasirtey integrating conventional treatment approaches with non -mainstream ones, and the member owned ColoradoCare would be likely to support this trend. Patients have tree right to select their primary care providers and may select pro,.zders who offer complementary or integrative health care. ColoradoCare would par for demonstrable- e`fective treatments and wellness interventions. Providers may offer additional complementary treatments at patient expense. q ColoradoCare would follow accepted standards of practice and reT ue evidence of the effectiveness of treatments—as do all health care financing organizations—before specific treatment services of any kind would be reimbursed. ColoradoCare Benefits and Services ColoradoCare would contract with providers for the delivery of the following benefits to beneficiaries.* (This dist is based on Amendment language and the waiver requirements to meet or exceed Medicaid and ACA standards.) Outpatient services for primary and specialty care Hospitalization Prescription drugs and durable medical equipment Mental health and substance abuse treatment Emergency and urgent care Preventive and wellness services and chronic disease management Rehabilitative services and devices Pediatric services including oral, vision, and hearing Laboratory services Maternity and newborn care Palliative and end -of -life care Long-term services and support (nursing home care), at least at the level specified by standards for people eligible for federal health care benefits. BENEFIT ENHANCEMENTS Because ColoradoCare offers lifetime health care, it would have an incentive to pay for the many forms of wellness programs and prevention that have benefits in the long-term. The initial dental, vision, and hearing benefits must equal or exceed ACA and Medicaid standards. The economic analysis used to determine the Initiative premium rates includes $1.1 billion to provide for increased dental care coverage that could be implemented as the board determined actual revenues to be sufficient. As ColoradoCare matures, it is expected to show increased savings, which could also be used to enhance these benefits. COST SHARING LIMITS No deductibles No copayments for designated preventive and primary care services Copayments waived for financial need Providers require ColoradoCare approval before using any cost sharing *If there werea financial strain on ColoradoCare as a result of people with high cost health care needs moving to Colorado for affordable heaj care, ColoradoCare could establish one year pre-existing condition limits for new residents. Such limits would need to be in compliance with Medicaid and Affordable Care Act waivers. Employers' Experience with ColoradoCare: Employers Newly Covering Health Care The impact on employers not currently providing employee health care coverage would be less than the 6.67% Health Care Premium Tax, varying between a 6.17% increase and a decrease of 1.83% or more. Because ColoradoCare covers the medical portion of workers' compensation, it would result in a 59% reduction in these expenses. In jobs that involve little danger, the employer savings would be about 0.5% of payroll, but in more dangerous jobs like construction, agricultural work with animals (cowboy), and tree pruning, it could be an employer savings of more than 8.5% of payroll, which is greater than the ColoradoCare Premium Tax. Thus, the impact would be an increased expense of no more than 6.17% of payroll, but less in many cases, with the possibility of an actual reduction of expenses by as much as 2.5% or more of payroll in industries with high workers' compensation costs. Factors that mitigate the impact All Colorado competitors would have the same expense. Currently, to provide health care, employers must finance policies that can easily cost over $10,000/employee, but with ColoradoCare, less than 6.17% of payroll would provide full health care coverage for all full-time and part-time employees and their families. Because of the high cost of health care insurance, the employer cost for employees who earn less than $15/hr would likely be less with ColoradoCare than the lowest level of coverage under the Affordable Care Act, even if employers currently receive subsidies. ColoradoCare would cover the owners' families as well as employees and their families. The self-employed Guaranteed comprehensive health care coverage for self and family, with no deductibles and a 96% actuarial value. Affordable health care coverage during start up years when income is lower. Income tax deductions are increased because the Premium tax, as a state tax, is deductible from both federal and state taxes. After considering the tax write-offs, the impact of the non -payroll tax rates is between 5.577% and 8.537%, depending on a persods tax bracket. In most situations, self-employment businesses will pay less than they would purchasing health care through the Affordable Care Act. Rural and Underserved Coloradans Experience with ColoradoCare Health Care providers are concentrated on the metropolitan front range 2r ae-zir g Pe .-.ry Cue ?ayaSc.ans •� � � �. : �: eeeeeeeeeeeeeer v,�=or ..n -a �s `"� It I Cap aaat�Ncv�ie:=E, Z�l1 �' �: - •• Data s=ce � � """ :::e E�Crsses-ver �ccc�e�a/ j^� .'`P�' � �� ...••. . Y..e. �,.. #.9 rf*]T�'8 •,_rews7stia:'.y F..'1;:3ted. - e s .� � : • e •A, � � wrorxe: The ColoradoCare Amendment requires reasonable access for all Coloradans, regardless of where they lire. Currently, in rural Colorado, a simple oro- :der appointment with a specialist may result in more than a one -day trip to a metropolitan area. Poor access is due to provider shortages aggravated by reimbursement policies of payers that do not adequately reimburse rural providers. ColoradoCare can use reimbursement policies to address this prop :der distribution problem. Examples are: The large number of uninsured in rural and underserved communities undermines the ability of providers to successfully earn a living in these areas. Universal coverage z1vo;:ld correct this problem and increase the number of rural providers. ColoradoCare could establish financial or payment incentives for: Large provider organizations staffing rural clinics with specialists who by being present a few days a month could eliminate the need for a full day's travel for a patients simple follow-up. Increased reimbursement incentives to account for increases travel time in designated rural areas. Supplemental compensation to primary care offices in designated rural and under- served areas. ColoradoCare wo-d-id. promote good access to health care in rural areas because quality, value, and good health outcomes require adequate access. Who ColoradoCare Covers i is assumed that residents and Colorado businesses will choose to discontinue purchasing other insurance coverage because ColoradoCare would provide high quality and comprehensive coverage for ever`- resident. However, some Federal healta care programs (such as 1 iedicare and the Veterans Health administration) cannot be transferred to ColoradoCare, and will continue coverage, with ColoradoCare pros;ding supplemental benefits. The Structure of ColoradoCare Accountability Elections are held every two years Members must approve anypremium increases and receive surplus refunds when possible Ombudsman for providers Annual audits Consumer advocacy organizations Media ColoradoCare Board CEO, CFO, & CMO Staff Financial Information Health Services Information Ombudsman for consumers Annual reports Health professional organizations Academic researchers he operations of ColoradoCare would be transparent, allowing the member owners and others to hold it accountable. ColoradoCare is mandated to be accountable through an independent Ombudsman Office for Consumers, an Ombudsman Office for Providers, annual audits, and annual reports. Transparency empowers professional, consumer, and scientific organizations, as well as the media, enabling them to provide critiques, suggestions, and analyses that will improve health care and the operation of ColoradoCare. Impact on Coloradans and Their Economy Economic stimulation from over $6.1 billion of increased discretionary funds for Coloradans and Colorado businesses The $6.1 billion savings achieved through ColoradoCare would broadly stimulate the economy. Colorado employers would reduce employee health care expenses by $3.8 billion, and they would have a further reduction in the costs of administering employee health care benefits. Colorado residents' total health care expenditures would be reduced by $2.3 billion, or an average of $515 per resident (excluding Medicaid beneficiaries who have no cost sharing so their relevant expenditures could not be reduced). State, county, and city governments, as well as schools and universities would save as employers. Net gain of 25,749 jobs ColoradoCare would redirect out-of-state spending to in-state spending. The majority of this change, $2.8 billion, would come from eliminating out-of-state insurance administrative jobs (Miller, 2015a). In addition, it is estimated that $0.9 billion of the savings resulting from lower costs due to ColoradoCare's market power would come from national corporations located out- of-state, thus keeping these savings in Colorado. There would be a $0.2 billion reduction in federal income taxes. From these three sources alone, there would $3.9 billion redirected from out-of- state spending to m -state spending. When money is put into the state economy a significant amount is recirculated within the state. This reinvestment continues so that there is a "multiplier" of every dollar put into the local economy resulting in an even greater economic stimulus than the initial funding put into the economy (Friedman, 2013). The impact of $3.9 billion available for Coloradans and Colorado businesses, would be a net gain of 25,749 jobs in Colorado in 2019. job transitions or churn is increased for one year Administrative jobs would be lost in the insurance industry and providers' offices, creating a greater than usual job churn. The $6.1 billion savings would remain in the Colorado economy, and as it was spent, the economy would create an equivalent number of new positions for these employees. In Colorado, the normal rate of job changing or churn is 480,000 job changes each year. The increased job churn would be mitigated by the unemployment insurance safety net and the continuous health care coverage, without COBRA charges, provided by ColoradoCare. L oarison: ;, -W ColoradbCare VS. � Current System Description of the Structure of the ColoradoCare Organization ORGANIZATION HIERARCHY ColoradoCare has a Board of Trustees that sets company policy and hires, monitors, evaluates, and fires, if necessary, the leaders of a managem er_t team. Unlike a corporation, there are no stockholders who take profits. Instead, the members are tl:e owners. The management team must include a Chief Executive Officer (CEO;, Chief Financial Officer (CFO), and Chief Medical Officer (C-\ 10) REVENUE COLLECTION 'he Amendment assigns revenue collection of the Health Care Premium taxto the Colorado Deparfrr_ent of Revenue. The state transfers federal funds to ColoradoCare. Other revenue sources may be developed (conations, grants, contracts, etc.) WE —VIBER RELATION'S ColoradoCare is responsible for payment of the efficient delivery of health care, including providing members and beneficiaries with benefits and customer service information and with membership cards both on a routine and urgent basis. In addition, members must be notified of and informed about elections. PRO17DER RELATION'S The State of Colorado would continue to license providers, and ColoradoCare would mai=ntain business relationships wit -Il providers. CONTRACT SERVICES In large Health care systems, many of the management services are most efficiently provided by service companies that bid for the contract. TEs may include services such as claims processing and pharmacy benefits. MEDICAL DATABASE SYSTEMS AND S_I ART CARDS ColoradoCare would develop an individual medical records system that -,r-ould protect the patient's privacv, It is anticipated that this system would be based on "Smart Cards; which are used in the US. armed services and by other countries. With these membership cards, which have a memory chip inside, patients would be able to access their medical history and providers would be able to enter and obtain information ,vita their patients permission. PAYMENT SYSTE IIS Al \D REFORMS ColoradoCare would be responsible for developing and evaluathig payment systems and reforms that would improve value, quality; and health outcomes. FIN'ANCIAL 1IAXAGF-WEN'T ColoradoCare would be respor_sible for financial planning, budgets, investments, and managing costs and revenues. ColoradoCare financial records would be transparent, and annual independent audits would be required. Structure of the ColoradoCare Organization ColoradoCare members: The residents of Colorado Board of Trustees Chief Executive Officer, Chief Financial Officer, and Chief Medical Officer Revenue Collection Colo. Department of Revenue collects premiums and transfers them to ColoradoCare State of Colo. transfers federal funds to ColoradoCare ColoradoCare develops a procedure with the Colo. Dept. of Revenue for efficient premium collection Provider Relations Enrollment process for Colo. licensed providers Distribution of fee schedule and procedures for reimbursement Publish routine and annual reports Medical Database Systems Provider interface Smartcard Confidentiality and data security Financial Management Fiscal planning Budgets Revenue management Cost management Transparency for Investments research and public Audits accountability Payment Systems and Reforms Member 8.537% On Day One of operation, 8.037% 25% ............................ implement reimbursement Relations Contract schedule that minimizes Develop and operate process forServices 35% ............................ disruption routine and urgent enrollment 5.577% Develop payment reforms and of beneficiaries Pharmacy benefit procedures to determine if they Publish regular communications management effectively m quality value, y irove ty, p Q and annual reports Claims processing and health outcomes Disseminate benefit and and provider Evaluation of payment models for access information payments improving Qty, value, and Inform Members about elections health outcomes What a Person Pays: Comparing the Present System with ColoradoCare What does a person pay now? Insurance premiums are either deducted from paycheck or paid out-of-pocket. Expenses vary greatly. Examples of insurance costs from the ACA: • The ACA considers up to 9.5% of payroll reasonable for the Silver Plan, a plan with substantial deductibles and copayments.* • The ACA caps premium costs for the Silver Plan, a plan with substantial deductibles and copayments, on a sliding scale from 3% to 9.5% of income for those above Medicaid level and below 300% federal poverty level (FPL), (Kaiser Family Foundation, 2014). Out-of-pocket costs are often hidden or hard to calculate and are increasing as the cost of health insurance rises. They are comprised of deductibles, copays, and services not covered. Examples of out-of-pocket from the ACA: • Above 250% FPL out-of-pocket is capped at $6,6001yr for an individual and $13,200/yr for a family. • Between 150% and 250% FPL, ACA caps on out-of-pocket may be as low as $2,2501yr. for an individual and $4,5001yr. for a family. What would a person pay under ColoradoCare? Premium Taxes for an employed person would be 3.33% of gross pay for insurance that offers greater benefits than the ACA Platinum Plan—and no deductibles (Miller, 2015a). Also, it covers the entire family. Premium Taxes for non -payroll income are 10% of gross income, which after adjustment for savings on income tax, result in the following impacts on taxpayers: when, mp federal impaaof ColoradoCare tax rate is premium is 10% ............................ 8.537% 15% ............................ 8.037% 25% ............................ 7.037% 28% ............................ 6.737% 33% ............................ 6.237% 35% ............................ 6.037% 39.6% ......................... 5.577% Out -of -Pocket expenses are reduced from 10% in ACA Platinum Plan to 4% of health care costs (Miller, 2015a). No deductibles No copayments for designated primary care or preventive treatment services Copayments for specialty care, medications, or tests are waived for financial need C0L1,.kKAI70C,+R.I — 1 WOW iT k4'C5ULD WORK _C.uLOkADOC;A:Rr — I 10 irrWOUu3 W011K Comparison for Medicare and Medicaid Beneficiaries Medicaid Beneficiaries Current System ColoradoCare • Generous range of benefits • shortage of pro-,zders due to below standard payment rates • When income rises above 139% of Federal poverty- level, continued health care coverage Jumps to 9% of income • -No premium expenses • Providers and coverage change when a person goes into or out of Medicaid. • Benefits equal to or better than current generous benefits • Any prot-ider because payments are the same for all • When income rises above 139% of Federal Poverty Level, continued health care coverage is 3.339b of wages • -No premium expenses • Providers and coverage are continuous regardless of income . Treatment for some conditions, such as Medicaid eligible residents could seek out a mental health, is restricted to limited provider of their choosing programs Medicare Beneficiaries Medicare beneficiaries could continue to be responsible for Medicare Parts B and D, except for those who are "dual -eligibles" through Medicaid. Current System • -Must purchase a supplemental plan or pay coinsurance charges 01;20% • Eligible for Medicare Advantage plans ColoradoCare • Quality Medicare supplemental -,N ith no deductibles provided by virtue of Colorado residency • Will apply to be a Medicare Advantage Plan that could be voluntarily joined • Assured that grandchildren and children in Colorado can afford health care • Oa=ten need to help . Because of qualii-ing for significant tax exemptions, grandchildren and children with Premium Taxes would end up costing 85% of Medicare unaffordable health care beneficiaries less than this supplemental coverage would cost if the current system continued. Medicare supplemental and Advantage pricing are complex. A single pian from one company may vary as much as 300% depending on age, zip code, and health of a beneficiary. Medicare Advantage Plans often have low premiums but have restricted access, choice, and cost sharing up to $3,900. The ColoradoCare supplemental would be one of the most comprehensive supplemental plans, because it has no deductibles. Voters' Approve Governor Proclaims the j Amendment passed 'Ihe interim Board is appointed / Colo. Dept. ofRevenue begins Transition ��Fund Tax Interim Boardhas completed seairh and has hired CEO, 00, . All staff have been hired and trained All systems have been tested and trial runs have been completed Colorado residents and providers have been notified of transition. Transition processes are completed. Contracts are activated ColoradoCare begins M operation. ColoradoCare conducts first election. , Necessary waivers _.. have been obtained. Due to Contracts for services are in place. premium Tnf mstr a tuts is complete. collection rash Supervisory and technical staff flow delays, have been hired. transition operations Ombudsman offices are established. .begin with grants. ColoradoCare notifies Governor that ColomdoCare will begin paying for Coloradans health care, and Regular Health Care Premium collection would ' begin on Jan. 1, 2019.' ColoradoCare conducts first election. , Legal and Market Conditions Determine How ColoradoCare Operates Desires of members The residents of Colorado X.. Colorado Constitutional Amendment That establishes ColoradoCare he design and operation of ColoradoCare will be determined by existing legal and market conditions. • ColoradoCare requirements and powers are described in the Amendment. The Affordable Care Act (ACA) waivers require that ColoradoCare meet or exceed all the guarantees of the ACA. ColoradoCare includes all the benefits and protections of Medicaid plus all ColoradoCare benefits. • ColoradoCare is a payment system that uses the existing medical infrastructure and provider community. • Marketplace dynamics shape what is possible for ColoradoCare. • Because ColoradoCare covers all residents, it would not have the current incentive to shift the costs of administration or economic consequences of poor treatment to other insurers. • ColoradoCare would be owned by and accountable to the residents of Colorado. The Colorado Health Care Marketplace0 : Toward a healthier health care marketplace �. n��tr■Aa��•anreu�• 4�� ,* �oq�r s■®aoi ,.1�I��s■sr1•pr •n a�enr�alrxwddl�Auxnnwl�r•�■ •11 fA mMsinuitts. trIII nmIII w a slam's n .jt 141? Ji i1 Y Y ml�i M l h■ r �r �';� • �'` Current Market Dynamics Are Dysfunctional l'4 ren markets fmc*ion `yell, costs decrease and qual?ty and access increase. Unfortunately, this is not the case in the current health care marketplace. • The US, rates poorly on overall quality; compared to other developed countries 6institute of Medicine, 2013). Costs are over twice as nigh in the US, and are two and a half times greater than the median of other developed countries (Commonwealth, 2011,). Access to health care is chaotic v. ith maty- uninsured, and many more who cannot afford the deductibles and cost sharing. Current Health Care Market Dynamics How are the current health care market dynamics dysfunctional? There is a well-knoum problem called "adverse selectionin health care insurance. A high-quality, accessible, and low-cost plan is unprofitable to insurance companies because it would attract people with high health care needs. In other words, a better product adversely selects for consumers who cost too much money. The _affordable Care Act addressed part of adverse selection by prohibiting ore -existing condition exclusions, but there are rnar_v-ways to attract the healthy such as offering high-deduc~able policies. The adverse selection dynamic oh'erpo« ens the incentive for high-quality, accessible, and to -v. -cost plans. Responsibilities of the Board of Trustees Interim Board The Interim Board would be comprised of 15 members who would be chosen by the Governor and the Colorado State Legislature majority and minority leaders. The Board would: Establish rules and procedures for operation. Hire a Chief Executive Officer (CEO), a CHief zir_ancial Officer (CFO), a Chief Mledical Officer (CNIO) and other personnel as it saw fit to operate ColoradoCare. Direct the process of obtaining waivers and receiving revenue. • Prepare for the transition to finance health care for all Coloradans. Inform the Governor when ColoradoCare was ready to assume responsibility for financing health care. In the event that waivers needed for financing l ere not obtained, inform the Governor that ColoradoCare would be unable to function and operations would be shut down, and unspent `unds could be refunded. Govern ColoradoCare for the first year that ColoradoCare is fully operational and paying for health care services. Design the elections for rhe first Elected Board, which would include 21 representatives elected from seven districts. Elected Board of Trustees Within three years of the passage of the ColoradoCare initiative, the Interim Board shall hold elections and transfer the ongoing governing to the Elected Board of Trustees. Its responsibilities include: • Continue the responsibilities of the Interim Board and govern he ongoing operation. of ColoradoCare. • arovide the public with an annual report and an independent annual audit. • Conduct elections every two years. THE COLORADOCARE BUSINESS MODEL ColoradoCare is operated and governed like a cooperative business, a business owned and run by the members it serves. VOTING MEMBERS People who have lived in Colorado for one year and are over 18 years of age. Accountable to the members Elect the Board of Trustees �e VIA ;bye Voting Members and all residents of Colorado, including people intending to establish residency, are beneficiaries. ColoradoCare assures payment of health care bills and the residents pay premiums according to ability. oss Provide health care services Colorado s Cam Pays. providers Colorado's health care providers EXAMPLES OF COOPERATIVE BUSINESSES Financially large example—Credit Unions are cooperatives, and as a group, they topped one trilliondollars in assets in 2012. Large membership example—Recreational Equipment, Inc. is a cooperative with 17 million members. Health care example --Group Health Cooperative in Seattle has operated as a large insurer and health care provider since 1947. Includes all residents within a geographical area—the Rural Electric Cooperatives are credited with increasing the number of rural homes that had electricity from 10% in the 1930s to 90% in the 1950s. A winning cooperative—The Green Bay Packers are a cooperative, owned by the residents of the city of Green Bay, and it has won more championships (13) than any other NFL team. ColoradoCare Encourages Desirable Market Dynamics ColoradoCare ends the incentives for selecting the healthier risk pool because everyone in Colorado would be in the same risk pool. Consequently, adverse selection is no longer an issue. ColoradoCare creates administrative efficiency by having one common payer so that people can choose any provider. Thus, it puts competition at the level of choosing a provider, not at the level of choosing an insurance company. ColoradoCare has the flexibility to use payment reforms that increase incentives for innovations that improve quality and access while containing costs. By reducing the middlemen administrators, moving competition to the provider level, and implementingpayment reforms, ColoradoCare would encourage the emergence of desirable marketplace dynamics. Marketplace Dynamics Encouraged by ColoradoCare 32 ColoradoCare Payment Reforms oloradoCare has the responsibility- to use payment reforms to the extent and on'-,,- to the extent that the reforms improve quality, value and health outcomes; assure access to health care for all Coloradans; and match the desires of the members. In the current health care marketplace, treatment is often poorly coordinates, and higher costs are sometimes associated xv-th poorer outcomes. Current -financial incentives in the fee-for-service system reward doing more things quickly rather than doing Drell -coordinated care that considers value. T:ie result is too many services, too much cost, and horse outcomes because treat n- ent is not Drell -coordinated (Ga�ande, 2009). Consequently- multiple pa}ment reforms are being instituted nationally and internationally for increasing the incentives for value, containing costs, and improving health outcomes. The national and international movement to establish payment reforms is here to stay. ColoradoCare has the potential to manage reforms better than the current system of federal regulat on and multiple insurers because it: Has transparent and centralized data Has sufficient market share to be effective Is accountable to the community Is loco av accessible to Coloradans Payment reforms in current system compared to ColoradoCare Current payment reforms driven by multiple insurers and Federal policies Each reform has little power to improve quality, value and health outcomes because it impacts only part of market. The multiple reform systems greatly increase administrative complexity. i Difficulty obtaining data from multiple payers makes evaluation difficult. r The lack of transparency ir. the system reduces the system's accountabi&I. Payment reforms decided by ColoradoCare ColoradoCare ir.$uences a large enough market share to improve quality; value and health outcomes. As one system, the administrative complexity Of reforr_is is kept to a rninimu-n. A central database allows e�Haent evaluation of the value of payment re:ar:ns. Tye data is transparent; making ColoradoCare accountable to the community. \yy � ,r,k so, y� tl r K; ;wkf.� ir' a W y 0 Sidert-a....' • i� i The Basics What would ColoradoCare do? It would finance comprehensive, high quality health care for every Colorado resident How would residents get health care in ColoradoCare? They would visit their health care professional who would submit a bill to ColoradoCare. There are no deductibles. There might be a small co -payment. What kind of organization would ColoradoCare be? ColoradoCare would operate using the cooperative business model. An elected Board of Trustees would hire and oversee an executive team responsible for the operations. Other cooperative businesses are credit unions, rural electric cooperatives, REI, and the Green Bay Packers. As a cooperative, it is owned by the members, who are all the residents of Colorado. The members elect the Board of Trustees. Legally, it would be classified as a political subdivision of the state, not under the direction of the legislature, governor, or any state administrative department or agency. How would it be created? Colorado voters would need to approve a Colorado constitutional amendment on the ballot, which would create ColoradoCare. It would require that an appointed Board create the infrastructure before the elected Board took over. How would it be funded? Itwould be funded with Affordable Care Act (ACA) waiver funds granted to states that can innovate with their own plans to achieve or surpass the goals of the ACA, by Medicaid waiver funds, and by a Health Care Premium tax on payroll and non -payroll income collected by the Department of Revenue. What if ColoradoCare were to have too much or too little money? If revenues were to exceed costs, then ColoradoCare could refund money, increase benefits, or build reserves. If revenues do not keep up with costs, the members would be asked if they would approve a Health Care Premium tax increase. Why is ColoradoCare a system change instead of incremental? Incremental changes added to the current systems excessive administrative costs would only increase the high cost of health care. Changing to a simple and fair system for collecting premiums and financing health care delivery is necessary to reduce the administrative waste and achieve the savings needed to finance universal coverage, improve quality, and lower the costs for Coloradans. M Examples of Promising Payment Reforms ColoradoCare will be able to implement known payment reforms in specific areas of health care to the extent they can be shown to improve the quality, value and health outcomes. The following are a few examples of effective reforms: Payments to Medical Homes: Providers in today's health care system are rushed and appointments are brief. The current payment structure makes it necessary for providers to see as many patients as possible, as quickly as possible, in order to earn enough to stay in business. There is too little time for the listening, talking, and coordination of care that is needed for good outcomes. One reform increases payments to primary care providers who use a "Medical Home" model—a primary care practice that takes responsibility for being the home base for patients, knowing their history, delivering preventive care, coordinating referrals, and encouraging healthy behavior. Some medical home demonstrations have been shown to improve care and lower costs. Building on successful model organizations The Mayo Clinic and Rocky Mountain Health Care in Grand Junction are national models for lower cost systems that obtain some of the best national health outcomes (Gawande, 2009). They have achieved this by pooling funding and paying providers for high value care instead of the number of tests and procedures that they do. These model organizations provide thoughtful and coordinated care directed by an above average number of primary care providers. There is a strong national and international movement to create Accountable Care Organizations that would pool funds like these model organizations, and also be accountable for obtaining results similar to the model health delivery systems. Continuous Quality Improvement (CQI) The Continuous Quality Improvement method identifies areas where improvement in quality and outcomes is possible, and a team of providers and expert researchers then develop educational methods to improve care. Intermountain Healthcare's integrated delivery system in Utah and Idaho is credited with using CQI to develop new childbirth protocols that reduced the rates of elective induced labor, unplanned cesarean sections, and admissions to newborn intensive care units. One protocol saved Utah $50 million each year (James & Savitz, 2011). Payment incentives can be developed for providers who subscribe to an effective CQI program. Potential Dangers with Payment Reforms Payment reforms are intended to decrease avoidable problems and unnecessary or harmful treatments and tests. If not managed carefully, they can interfere with timely, recommended, and commonly required treatments or create more administrative work than they are worth. To ensure that payment reforms would be managed correctly, the comprehensive, transparent data, and public accountability that ColoradoCare would establish would be needed. Provider Compensation Would Be Competitive -Ft Collins 0 -Denver Grond Junction -Colorado Springs i•Pueblo V What keeps provider payments competitive and responsive to the needs of Colorado u ithout in-state competition between insurance company payers? • ColoradoCare Is a business model that functions like a cooperative; the owners are the same people who are patients. Unlike an insurance company's owners, it crowd be said that the ColoradoCare members have Both their money and "thezr skin in the game" (system). Consequently, members will want payments that are competitive vita the other 49 states in order for ColoradoCare to obtain and retain tHe providers needed for a quality health care system. • Because it is local and accountable to Coloradans, ColoradoCare would be more responsive to geographical workforce shortages, or needs for local specialists, than a national insurance corporation or federa administrator. TABLE OF CONTENTS 9cknow_edgme,ts i Table of convents The'aasics 1 Business and design considerations 2 The Coia-adoCarz D4siness model 3 des onsibilities of the Board of Trustees 4 :zgal and marL---t cordino s &.ern:ir a how Co'_oradoC,are operates 5 Sa_-npie Co?oradaCare implz_nentat=on time:_ne 6 Structure of the ColoradoCzre organization 7 Description of str acture of u.e ColoradoCare organization 3 1 he stracturz of Co oradoCare acce-,�ntab!`-v 9 `+4 -ho Colora&Care covers 10 CatoradoCare benefits and services 1; Cornp,emer_tary, alternative and integrative rnedicine 12 Financial Considerations 13 Health care premiums 14 ColoradoCare reven::e 15 D?stribution of rro;ected savings in 2016 16 Financial sustainabLity 17 Are the large savings possible? 18 Community impacts 19 Patients expenerce w i Co_o--adoCare 20 Accessing care _. ColoradoCare 21 Providers' experiz^.ce - 7'th Co.oradoCarc 22 F--r_ployers' experience wi& Co_oradoCa e 23 Employers new:v covering health care 24 The self-employed 24 Experience for =._rat and under -served Coloradans 25 Impact on Coloradans and their economy 26 Cost comparison: ColoradoCare vs. current system 27 W:_at a person_ pays: ComparLig _:e present system with ColoradoCare 28 Comparison for Medicaid and'_1.edicare Beneficiaries 29 The Colorado health care marketplace: Towards a healthier health care marketplace for Coloradans 30 Current market dyrarnics are dysfunctional 31 ColoradoCare encourages desirable marker dvnarnics 32 ColoradoCere Y zment reforms 33 Exa.:_p:es of promisir_g payment r6ur_no- 34 Po.e :tial dangers w h pa, anent refor.- s 34 Provider compensation ,%-ould be cer ioetitive 35 ColoradoCare history 36 References 37 Published by ColoradoCareYes 575 West Mulberry Street Louisville, CO 80027 Edition 1.0, June, 2015 Copyright and Photocopy and Reproduction Permission © 2015 ColoradoCareYES—As owner of the copyright, ColoradoCareYES gives permission for this booklet and the pages within to be reproduced and/or published, either in print form or electronically, as long as the authorship is acknowledged. Acknowledgments This booklet and the ideas in it are the product of many individuals who have been introducing ideas, refining ideas, offering assistance, and gathering new information about universal health care. Some of the contributions have come over many years and some in recent weeks. I often truthfully say that whatever creative or writing success I have had is because I have friends who talk me out of my bad ideas, leaving a small number of good ones, and bring me their good ideas. The original authors of the Colorado Health Care Cooperative proposal include Sen. Irene Aguilar, Lyn Gullette, and Bill Semple, who have been working together since 2008. Multiple contributions have come from universal health care advocates and supporters of the ColoradoCare model, including: James H. Waters, Eliza Carney, Charles Smith, Ralph Ogden, Dave Beckwith, Tom Bost, Jed Shapiro, Sara Wright, Corrine Fowler, Mercedes Aponte, Gilad Gordon, Joseph Rogers, Patricia Rice, Elaine Branj ord, Eric Reinke, Jake Owsley, John Gurule, Katy Kohnen, Ken Connell, Ken Chapin, Marley Hamrick, Rich Shannon, Dan Cohen, Mary Estill Buchanan, Richard Passoth, Gerald Friedman, Carol Hedges, William Hsiao, Rep. Joann Ginal, Michael Costa, Robyn Lunge, T.R. Reid, Don Berwick, Mark Matthews, Jeanne Nicholson, Ricki Hadow, Michael Kent, and Benita Campbell. This list can only include some of the prominent recent contributors when in actuality, hundreds have contributed to this recent push for universal health care starting in 2008 when the core group came together. It builds on the movement for universal health care that is over a century old I am indebted to all of these people who have worked for universal health care and health care justice. The major portion of this booklet is taken from the booklet, "The Colorado Health Care Cooperative: How it would work," prepared for the Colorado Foundation for Universal Health Care in 2014. The Foundation gave public permission to reproduce or publish its booklet. • ColoradoCare ,Die YES0 ColoradoCare History the U.S. has the most expensive health rare system in the industrialized world, costing twice as much per person as other developed countries. While quality is excellent in the U.S. for those who have health care, it is also excellent throughout the industrialized world. Overall, U.S. health care outcomes are worse than other industrialized countries. The U.S. has a large population who cannot afford health care due to either no insurance or underinsurance. In recognition of these problems, in 2006, the Colorado Legislature and Governor Owens established the 208 Blue Ribbon Commission for Health Care Reform to study comprehensive reforms that could cover all Coloradans and decrease the costs. Four of ColoradoCare's original proponents participated in this Commission process. Lyn Gullette, Ivan Miller, and Bill Semple presented a proposal, and Dr. Irene Aguilar served as the Co -Chair of the Vulnerable Populations Task Force. The universal health care proposal analyzed by the Commission showed that it was possible to create universal coverage, and that universal coverage would save costs. In 2009, Representative John Kefalas, joining with these four original proponents and a growing group of supporters, introduced a universal health care proposal in the Colorado Legislature (HB09-1273). The passage of the Affordable Care Act (ACA) in 2010 gave states an unprecedented opportunity to use an ACA Section 1332 waiver, which allows states that can meet or exceed ACA standards to use the ACAfunds to design their own healthcare financing system. In 2010, Dr. Irene Aguilar was elected to the Colorado State Senate, and she introduced the Colorado Health Care Cooperative proposal, a universal health care proposal, into the Senate (SBI 1-168). Harvard economist, Dr. William Hsiao, reviewed the proposal, and found it was viable and ready for an economic analysis. The Colorado Foundation for Universal Health Care (Foundation) commissioned Dr. Gerald Friedman to conduct the economic analysis, which was finished April 2013, coinciding with Senator Aguilar, M.D. introducing legislation to put the Cooperative on the ballot (SCR13-002). In 2015, the Colorado Health Care Cooperative proposal was improved and renamed ColoradoCare. Co-operate Colorado submitted the ColoradoCare proposal to the Secretary of State as a citizens" initiative to be placed on the ballot in 2016. In April 2015, the Secretary of State approved the wording of the initiative and assigned the title of proposed Initiative #20 for the 2016 ballot. Immediately after the title was assigned, ColroadoCareYES was established to campaign to bring universal health care to Colorado via a 2016 ColoradoCare ballot win. References Friedman, Gerald ;2013). Three Possibilities for Colorado's Future Health Care Financing an6 Delivery. Colorado Foundation for Um ersal Health Care, Boulder. www.counivers-allleal&�.org research' econorricanalysis;. Colorado Division of Insura_rce (2014). Health Insurance Cost Report 2012. Colorado Division of Insurance, Colorado State Govern --rent, Denver, CO. Colorado Health Institute, 12012). Health Care providers are concentrated on the metropolitan front range. Colorado Health Institute, Denver, CO. Commonwealth 12011). The U.S. Health System in Perspective: A Comparison o -` Twelve Industrialized Nations. The Commonwealth Fund, Washington, DC. Gawande, A. (2009;. ` he Cost Conundrum, New Yorker Annals of Medicine, 6.1.09. New Yorker, New York. w Aiv.retiv yorker.com magazine: 2009 06101 /the -cost -conundrum. HealthCare.gov, 2014. Z.S. Centers for Medicare & Medicaid Services. U.S. Centers for Medicare & Medicaid Services, Washington, DC. Ir-stitute of -Medicine (2012). We spend $730 billion on unnecessary health care. Two charts explain why. `Vonkblog, 9.712. Washington Post, Washington, DC. wwwwashir-gtonpost.corn -blogs wonkblog wp 2012'09 O'.'Nve-spend-750-billion-on-unnecessary-health-care-t�.o-charts-explain-why . Institute o: Medicine ;2013) L.S. Health in International Perspective: Shorter Lives, Poorer Health. Report Brie£ Institute of -Medicine, Washington DC. James, B.C. & Savitz, L.A. (2011). How Intermountain Trimmed Health Care Costs 'Through Robust Quality Irr_provernert Efforts, Health _4}rairs, no. (2011):doi.10.137 hlthafi:2011.0358. Kaiser Family Foundation (2014). Explaining health care refo_r_i: Questions about heath insurance subsidies. Kaiser Family Foundation, Washington, DC. http: 'kfforg health-costs;issue-brief explaining -health -care -reform -questions -about -health/ -Martin, A.B., Hartman, M., Whittle, L., Catlin, A. & National Health Expenditure Accounts Team, (2014). National Health Spending In 2012: Rate Of Health Spending Growth Remained Low For The Fourth Consecutive Year. Health Affairs, 33:67-77. Miller, Q. (2015a). Econo nic analysis of the ColoradoCare proposal, Including addendum with 2019 projections. Colorado Foundation for Universal Health Care, LouisyiLe, CO. r�r+.cauniversall,ealth. org. Miller, I.J. i20I5b). ColoradoCare economic analysis overview. Colorado Foundation for Universal Health Care, Louisville, CO. rv-u w couniversalhealth.org. Physicians for a National Health Plan 12012). Himm. stein'Woolhandler analysis o: CPS based on Bureau of Labor Statistics and'National Center for Health Statistics. Physicians for a National health Plan, Chicago, Ii. Resources The Colorado Foundation for Universal Health Care, tv,-h-A coumversalhealth.org, has additional information about economics and the history of the development of this proposal for universal health care. ColoradoCare How it would work Tis booklet is intended to answer questions about .-hat health care with ColoradoCare would be like and how it would work. This booklet is organized so that readers can browse for questions of interest. In its entirety, it provides a comprehensive explanation of how ColoradoCare would function and how it would affect stakeholders. Ivan J. Miller, Ph.D. June, 2015 "ColoradoCare will be a win -win-win for our state: - It will provide health insurance for everybody. - It will save families and businesses billions - It will get us a waiver from ObamaCare, so we're not bound by policies imposed from Washington, D.C." Plus: "When Colorado demonstrates that we can cover everybody at reasonable cost, we will show the whole country how to do it." - T R. Reid, besisellifikq health policy r�rlthor r aid fi drirar akar. rIM M V 10 V r`' e 7 ColoradoCare yFS ColoradoCareYES 575 West Mulberry Street LoUi5Iriltey CO 80027 www.CaloradaCareYES.co ColoradoCare How it would work Colorado TT } 4 or a _ 7A If approved by the voters, ColaradoCare would finance comprehm—sive, high qtY health care for every Coloradan. V ColaradoCare PI YES Prepared for Colorado areYes by tvaa 1. Mi11er, Ph.D. ColoradoCare www ColoradoCareYES.co Worksheet for comparing your current health care coverage to ColoradoCare Comparison of health care cost, benefits, and features Your current health care plan ColoradoCare How comprehensive is your plan? Does it cover all health care needs? Can you keep your providers if your employer changes health care plans to a different company? Will you keep your coverage if you get laid off, lose your job, or your company is sold? Is your choice of provider restricted? ColoradoCare is comprehensive and covers the services on the attached list of ColoradoCare benefits. ColoradoCare coverage is continuous, so there are no provider changes caused by changing insurers. You are covered by ColoradoCare as long as you are a Colorado resident. ColoradoCare allows you to choose any primary care provider. Some primary care providers may have a limited network of specialist providers. ColoradoCare provides more than your comprehensive health care. It is a payment system that also ensures comprehensive health care for your children, grandchildren, and parents living in Colorado, for your friends and neighbors, and for you at times of financial misfortune. Comparison of health care expenses Your current health care plan ColoradoCare Payroll premium expense (Annual wages x 3.33%) $ Annual premium expense $ Non -payroll premium expense (All income that is not on a W-2— this premium can be calculated on $ the worksheet on the back of this page) Deductible expense $ Deductible expense $ none Expenses for health care services Comprehensive benefits with very few services not covered. not covered by your plan (See attached list of benefits) Copayments and No copayments for most cost-sharing expenses: primary care or prevention Provider visits/ yr. services, and if any, are Labs and tests/yr. waived for those with Medications/yr. $ financial need $ Estimated total expenses $ Estimated total expenses $ Out-of-pocket safety net Out-of-pocket safety net Copayments and cost sharing waived after you have Copayments are waived for both limited income and spent a maximum of this amount: high medical expense so that financial barriers do not $ prevent obtaining necessary health care. Non-payrou premiums for ColoradoCare are calculated on back of page v2.4,8.2.15 ColoradoCare �s 575 West Mulberry Street Louisville, CO 80027 www.ColoradoCareYES.co ColoradoCare non -payroll premium calculation page* If you have non -payroll income (everything that is not on a W-2 is non -payroll income), complete this page. Before completing, decide if you want to calculate as an individual or a joint income tax filer. Total gross non -payroll income If you receive Social Security, annuity, pension or IRA income, the following amounts are excluded from the Premium tax. If you are on Social Security subtract up to $9,000 for an individual filer and $12,000 for a joint filer $ If you are over 55 subtract up to $20,000 of additional Social Security, annuity, pension or IRA income from each taxpayer. $ If you are over 65 subtract up to $4,000 of additional Social Security, annuity, pension or IRA income from each taxpayer. $ Total Premium Tax exclusions for Social Security, annuity, pension, or IRA income Maximum exclusion is $33,000 for $ individual filer and $60,000 for joint filer Subtract exclusions to determine non -payroll income subject to Premium Tax $ The Non -Payroll Premium Tax rate is 10%, but there is an income tax write-off because this state tax is exempt from federal and state income taxes. After the tax write off, the impact on your after tax income depends on your federal income tax rate. Select the "Premium Tax impact rate" that applies to you: Individual filer taxable income Joint filer taxable income Federal income tax rate Your Premium Tax impact rate up to $9076 up to $18,150 10% 8.537% over $9076 over $18,150 15% 8.037% over $36,900 over $73,800 25% 7.037% over $89,350 over $148,850 28% 6.737% over $186,350 over $226,850 33% 6.237% over $405,100 over $405,100 35% 1 6.037% over $406,750 over $457,600 39.6% 1 5.577% (Non -payroll income subject to premium Tax) $ _x (Your Premium Tax impact rateL % Your Non -Payroll Premium Expense Premium Tax for combined payroll and non -payroll income is capped at $350,000 for individual filers and $450,000 for joint filers. With the write-off and the cap, and with the exact amount depending on the mix of sources of income, the ColoradoCare Premium Tax impact on after tax income for any individual income tax filer would be less than $21,805, and for any joint income tax filer would be less than $27,167. This amount is less than the cost of some family health insurance plans. *For a full explanation of calculations and taxes, see Miller, I. J., (2015) Economic Analysis of the ColoradoCare Proposal: Addendum with 2019 Projections, Appendix B and C. Colorado Foundation for Universal Health Care. www.CoUniversalHealth.org v2.3, 7.26.15 Executive Summary of Economic Analysis of the COLORADO FOUNDATION FOR ColoradoCare Proposal Addendum with 2019 UNIVERSAL HEALTH CARE projections www.couniversalhealth.ore Prepared by Ivan J. Miller, Ph.D. 8.3.15 The Colorado Foundation for Universal Health Care published an Economic Analysis of the ColoradoCare Proposal in April 2015 with projections for the year 2016. This addendum provides additional projections for 2019 and compares Coloradans' expenses under the current system with their expenses under ColoradoCare. In the previous economic analyses of this proposal, Colorado Health Expenditures (CHE), a measure that is based on the Centers for Medicare and Medicaid Services (CMS) National Health Expenditures (NHE) data, was used to compare the forecast expenses for the current system and ColoradoCare. However, this measure is not an expression of what Coloradans experience as health care expenses—the health care premiums and out-of-pocket expenses they collectively pay each year. This addendum analysis converts CHE to Coloradans' health care premiums and out-of-pocket expenses combined (Premiums + OOP), and compares the current system with ColoradoCare. Table 2 2019 Cost Projections for Coloradans: Current System Compared to ColoradoCare Current system in 2019 ColoradoCare in 2019 $25.0 billion Premiums Coloradans would pay $24.9 billion -$0.3 billion refund to Medicaid eligible net $24.7 billion premium taxes Out-of-pocket expenses $1.1 billion for dental $1.1 billion for dental* Coloradans would pay $5.2 billion for medical $0.9 billion for medical $6.3 billion total out-of-pocket $2.0 billion total out-of-pocket $26.7 billion The amount that Coloradans would $31.2 billion includes $1.5 billion surplus that is pay for Premiums + OOP expenses available for future health care costs and/or a refund to Coloradans * This analysis finds that there would be $1.2 billion available in ColoradoCare's budget to expand dental beyond the minimum dental coverage required by both the initiative language and ACA and Medicaid waivers. In the analysis, it is assumed that the ColoradoCare Board of Trustees will approve this allocation of money earmarked for dental coverage; however, the amount of dental benefit would need to be determined by the Trustees. Under ColoradoCare, in 2019 Colorado residents and employers would pay $26.7 billion in premiums and out-of-pocket expenses for the services typically covered by comprehensive health and dental insurance — $4.5 billion less than the $31.2 billion cost with the current system. Positive impacts of ColoradoCare Coverage: • All Coloradans would be covered compared to a projected 8% uninsured rate under the current system. • The benefit package would be more comprehensive than the best Affordable Care Act plans. • The economic analysis includes sufficient funding to pay for as much dental care as insurance currently pays, including coverage for children. • Coverage would continue regardless of employment, marriage, age, or health condition. • No one would be forced to change health care providers because an employer changed insurance plans. Funding for increased health care: • ColoradoCare adds $1.5 billion to provide for health care to the previously uninsured. • ColoradoCare adds $0.4 billion for the increased health care services used because health care would be affordable. Page 1 va.z Sources of Savings: • ColoradoCare reduces administrative expenses by $6.2 billion. These savings come from removing redundant insurance -industry administration and from decreasing bureaucracy and paperwork in providers' offices. • Prices for durable medical equipment and pharmaceuticals can be reduced by $1.2 billion using bulk purchasing market power. • A unified billing system would reduce fraud by $0.6 billion. • Over time — with a unified system supporting innovation, practical efficiencies, and integrated health delivery — savings are projected to increase. For Colorado Residents: • ColoradoCare would have no deductibles, no copays for most preventive and primary care, and would waive other copayments when they cause financial hardship. • All Coloradans would have affordable health care. The current system is projected to leave more than 23% Coloradans underinsured in 2019. • There would no longer be burdensome medical debt or bankruptcy caused by medical bills. • Overall, Colorado residents and employers would pay $4.5 billion less for health care. • The calendar year 2019 is projected to have a $1.5 billion surplus to offset future health care costs and/or be refunded to Premium Tax payers. • Overall, Colorado residents would gain over $1.1 billion from income tax deductions. For Colorado Employers: • The aggregate reduction of expenditures for employee health is projected to be $3.8 billion. • There would no longer be expenses related to administering employee health care. • The medical portion of workers' compensation (59%) would be covered by ColoradoCare. • State, counties, cities, school districts and universities would benefit from significant savings for employee coverage. For providers and health care professionals: • Providers would receive prompt, adequate payment for every patient. • The billing system would be simplified. • ColoradoCare would be able to support practical innovation, responsiveness to community needs, and improved access for patients, especially in rural areas. For Medicaid beneficiaries: • All benefits would be maintained with a probable increase in dental benefits. • There would continue to be no premiums for those under 138% of Federal Poverty Level. • Beneficiaries would be able to see all providers and would no longer restricted to "providers who take Medicaid." Impact on Medicare beneficiaries: • Medicare Parts A, B, and D, and Medicare Advantage would remain the same. • ColoradoCare provides a comprehensive Medicare supplemental plan without deductibles. • Anticipated adult dental, vision, and hearing services would be available to Medicare beneficiaries. • Tax write-offs result in 85% of Medicare beneficiaries paying less in Premium Taxes than they would for the cost of the supplemental plan under the current system. Impact on the Colorado economy: • By redirecting $4.5 billion in out-of-state spending to in-state spending, Colorado would see a net gain of 32,000 jobs in 2019. • Although most health care insurance administration jobs lost would be out-of-state, some jobs would be lost in Colorado, and job churn would increase for one year. The savings from ColoradoCare would stimulate the economy and create a greater number of new jobs. The typical rate of Colorado job change or churn is 480,000 per year. The churn would be mitigated by the unemployment insurance system and the continuous health care coverage that ColoradoCare would provide. Executive Summary of Economic Analysis of the ColoradoCare Proposal Addendum with 2019 projections, page 2 vat 1 City or County Akron Alamosa Alamosa County Archuleta County Arvada Aspen Ault Auora Avon Berthod Boulder Boulder County Breckenridge -- Broomfield Buena Vista Canyon City Carbondale Castle Rock Cedaredge Centennial Chaffee County Cherry Hills Village Cheyenne County Clear Creek County Colorado Springs Commerce City Cortez Crowley County Custer County Dacano Delta Delta County Denver (City and County) Douglas County Durango Eagle Eagle County Eaton Englewood Erie Estes Park Evans Firestone Frederick Current $ 186,774.00 $ $ 755,496.00 $ $ 1,872,776.00 $ $ 1,065,830.00 $ $ 8,710,603.00 $ $ 3,248,723.00 $ $ 47,468.00 $ $ 25,878,000.00 $ $ 1,575,253.00 $ $ 247,747.00 $ $ 14,524,732.00 $ $ 13,435,042.00 $ $ 1,954,895.00 $ $ 2,904,203.00 $ $ 5,627,962.00 $ $ 291,774.00 $ $ 1,355,165.00 $ $ 907,800.00 $ 5,188,921.00 $ 215,035.00 $ 488,597.00 $ 1,370,800.00 $ 569,228.00 $ 645,633.00 $ 1,878,180.00 $ 21,430,247.00 $ 3,339,881.00 $ 2,237,363.00 $ 400,810.00 $ 408,071.00 $ 182,361.00 $ 911,551.00 $ 1,436,686.00 $ 109,529,463.00 $ 11,938,119.00 $ 3,486,374.00 $ 818,792.00 $ 6,662,485.00 $ 168,457.00 $ 4,477,659.00 $ 1,049,480.00 $ 1,631,618.00 $ 850,522.00 $ 601,779.00 $ 602,275.00 ColoradoCare 32,863.00 269,824.00 585,996.00 398,572.00 3,286,267.00 1,394,488.00 25,354.00 11,672,500.00 403,511.00 107,458.00 8,129,682.00 6,980,461.00 785,990.00 1,052,316.00 2,880,623.00 111,832.00 473,820.00 $ 240,804.00 $ 1,939,219.00 $ 77,822.00 $ 279,383.00 $ 392,194.00 $ 240,143.00 $ 115,382.00 $ 747,040.00 $ 10,116,219.00 $ 1,551,230.00 $ 414,128.00 $ 119,099.00 $ 164,793.00 $ 88,896.00 $ 328,380.00 $ 630,448.00 $ 52,135,753.00 $ 4,222,744.00 $ 1,062,032.00 $ 157,757.00 $ 1,683,514.00 $ 90,045.00 $ 2,141,445.00 $ 535,161.00 $ 548,948.00 $ 440,775.00 $ 193,271.00 $ 218,413.0 0 Savings ° $ 153,911.00 $ 485,672.00 $ 1,286,780.00 $ 667,258.00 $ 5,424,336.00 $ 1,854,235.00 $ 22,114.00 $ 14,205,500.00 $ 1,171,742.00 $ 140,289.00 $ 6,395,050.00 $ 6,454,581.00 $ 1,168,905.00 $ 1,851,887.00 $ 2,747,339.0 - $ 179,942.00 $ 881,345.00 $ 666,996.00 $ 3,249,702.00 $ 137,213.00 $ 209,214.00 $ 978,606.00 $ 329,085.00 $ 530,251.00 $ 1,131,140.00 $ 11,314,028.00 $ 1,788,651.00 $ 1,823,235.00 $ 281,711.00 $ 243,278.00 $ 93,465.00 $ 583,171.00 $ 806,238.00 $ 57,393,710.00 $ 7,715,375.00 $ 2,424,342.00 $ 661,035.00 $ 4,978,971.00 $ 78,412.00 $ 2,336,214.00 $ 514,319.00 $ 1,082,670.00 $ 409,747.00 $ 408,508.00 $ 383,862.00 /o Savings 82% 64% 69% 63% 62% 57% 47% 55% 74% 57% 44% 48% 60% 64% -49%---- 62% 49%---- 62 % 65% 73% 63% 64% 43% 71% 58% 82% 60% 53% 54% 81% 70% 60% 51% 64% 56% 52% 65% 70% 81% 75% 47% 52% 49% 66% 48% 68% 64% r City or County Current ColoradoCare Savings % Savings Fremont County $ 2,335,054.00 $ 729,213.00 $ 1,605,841.00 69% Frisco $ 752,550.00 $ 296,147.00 $ 456,403.00 61% Fruita $ 791,769.00 $ 277,776.00 $ 513,993.00 65% Ft. Lupton $ 497,243.00 $ 192,060.00 $ 305,183.00 61% Ft. Morgan $ 2,456,331.00 $ 458,652.00 $ 1,997,679.00 81% Garfield County $ 8,644,749.00 $ 1,734,809.00 $ 6,909,940.00 80% Georgetown $ 85,468.00 $ 42,001.00 $ 43,467.00 51% Gilpin County $ 1,762,399.00 $ 470,876.00 $ 1,291,523.00 73% Glenwood $ 1,821,550.00 $ 706,670.00 $ 1,114,880.00 61% Golden $ 1,968,507.00 $ 929,958.00 $ 1,038,549.00 53% Greeley $ 9,404,821.00 $ 3,372,406.00 $ 6,032,415.00 64% Greenwood Village $ 2,757,807.00 $ 1,100,328.00 $ 1,657,479.00 60% Gunnison $ 686,294.00 $ 321,643.00 $ 364,651.00 53% Gunnison County $ 1,623,625.00 $ 675,833.00 $ 947,792.00 58% Hinsdale County $ 277,420.00 $ 100,763.00 $ 176,657.00 64% Holyoke $ 270,001.00 $ 68,527.00 $ 201,474.00 75% Hudson $ 127,156.00 $ 56,250.00 $ 70,906.00 56% Jackson County $ 257,141.00 $ 83,432.00 $ 173,709.00 68% Jefferson County $ 18,790,597.00 $ 10,779,668.00 $ 8,010,929.00 43% Kit Carson County $ 1,190,230.00 $ 254,461.00 $ 935,769.00 79% Lafayette $ 2,353,689.00 $ 913,064.00 $ 1,440,625.00 61% LaPlata County $ 4,852,923.00 $ 1,407,585.00 $ 3,445,338.00 71% Larimer County $ 14,612,152.00 $ 6,382,303.00 $ 8,229,849.00 56% Las Animas County $ 836,930.00 $ 384,299.00 $ 452,631.00 54% Leadville $ 209,856.00 $ 77,477.00 $ 132,379.00 63% Limon $ 365,194.00 $ 84,379.00 $ 280,815.00 77% Littleton $ 5,890,267.00 $ 2,022,724.00 $ 3,867,543.00 66% Lone Tree $ 1,203,295.00 $ 410,178.00 $ 793,117.00 66% Longmont $ 8,489,472.00 $ 3,941,736.00 $ 4,547,736.00 54% Loveland $ 7,228,168.00 $ 2,939,501.00 $ 4,288,667.00 59% Manitou Springs $ 373,776.00 $ 180,212.00 $ 193,564.00 52% Meade $ 105,846.00 $ 42,832.00 $ 63,014.00 60% Mesa County $ 5,253,267.00 $ 3,243,928.00 $ 2,009,339.00 38% Miliken $ 394,537.00 $ 108,287.00 $ 286,250.00 73% Mineral County $ 108,743.00 $ 77,155.00 $ 31,588.00 29% Moffat County $ 2,327,783.00 $ 650,742.00 $ 1,677,041.00 72% Montrose $ 2,388,519.00 $ 514,314.00 $ 1,874,205.00 78% Northglenn $ 2,325,246.00 $ 942,182.00 $ 1,383,064.00 59% Otero County $ 1,823,702.00 $ 338,548.00 $ 1,485,154.00 81% Parker $ 1,826,802.00 $ 1,258,710.00 $ 568,092.00 31% Phillips County $ 401,412.00 $ 135,733.00 $ 265,679.00 66% Platteville $ 117,745.00 $ 65,217.00 $ 52,528.00 45% Pueblo County $ 7,336,306.00 $ 3,101,779.00 $ 4,234,527.00 58% Rangely $ 317,802.00 $ 127,904.00 $ 189,898.00 60% Rifle $ 1,225,860.00 $ 369,229.00 $ 856,631.00 70% Rio Blanco County $ 2,488,299.00 $ 524,217.00 $ 1,964,082.00 79% ' City or County Current ColoradoCare Savings % Savings Rio Grande County $ 905,929.00 $ 325,676.00 $ 580,253.00 64% Rocky Ford $ 305,235.00 $ 83,715.00 $ 221,520.00 73% Saguache County $ 535,918.00 $ 223,272.00 $ 312,646.00 58% Salida $ 693,054.00 $ 231,422.00 $ 461,632.00 67% San Juan County $ 131,426.00 $ 53,581.00 $ 77,845.00 59% Sedgewick County $ 249,710.00 $ 77,958.00 $ 171,752.00 69% Sheridan $ 409,119.00 $ 208,816.00 $ 200,303.00 49% Silverthorne $ 791,988.00 $ 313,461.00 $ 478,527.00 60% Steamboat $ 2,702,846.00 $ 865,934.00 $ 1,836,912.00 68% Sterling $ 1,586,071.00 $ 335,363.00 $ 1,250,708.00 79% Summit County $ 5,811,643.00 $ 1,560,689.00 $ 4,250,954.00 73% Teller County $ 2,265,006.00 $ 621,782.00 $ 1,643,224.00 73% Thornton $ 10,779,477.00 $ 3,872,349.00 $ 6,907,128.00 64% Tinmath $ 40,101.00 $ 17,947.00 $ 22,154.00 55% Vail $ 3,004,800.00 $ 1,074,370.00 $ 1,930,430.00 64% Washington County $ 1,120,358.00 $ 343,491.00 $ 776,867.00 69% Weld $ 11,581,437.00 $ 4,972,393.00 $ 6,609,044.00 57% Wellington $ 142,942.00 $ 86,744.00 $ 56,198.00 39% Westminster $ 10,523,652.00 $ 3,921,144.00 $ 6,602,508.00 63% Wheatridge $ 1,818,705.00 $ 1,043,701.00 $ 775,004.00 43% Wndsor $ 1,235,956.00 $ 388,267.00 $ 847,689.00 69% Woodland Park $ 770,718.00 $ 279,026.00 $ 491,692.00 64% Wray $ 338,333.00 $ 93,785.00 $ 244,548.00 72% Yuma County $ 1,045,738.00 $ 267,420.00 $ 778,318.00 74% Summary of ColoradoCare — Amendment 69 ColoradoCare is a resident -owned, non-governmental health care financing system designed to ensure comprehensive, quality, accessible, lifetime health care for every Colorado resident. The benefit package will enhance the comprehensive health care services required by Medicaid and the Affordable Care Act. Premiums will be collected from Coloradans based on income, securing health care regardless of financial circumstance. This efficient, universal system will operate in the interests of Coloradans. By eliminating layers of bureaucracy and reducing administrative and other nonmedical costs, ColoradoCare will cover all residents and still cost less than the current system. Process: By a Citizens' Initiative process, Coloradans collected enough signatures to successfully qualify ColoradoCare for the November 2016 ballot as Amendment 69. Establishment: Section 1332 of the Affordable Care Act allows Colorado to obtain waivers to create her own health care system. ColoradoCare will not be an agency of the state nor be controlled by any state executive, department, commission, board, bureau or agency. Interim Board: A 15 -member Interim Board appointed by legislative leaders and the governor will oversee all operations until residents elect the Board of Trustees. The Interim Board will work with state and federal agencies; apply for Section 1332 waivers; coordinate with providers; develop a non-partisan, fair election process for Board elections in seven local Colorado districts; and establish rules to ensure that meetings, records and operations are public and transparent. Board of Trustees: Within three years, residents from each of the seven Colorado districts will elect three Trustees. These 21 Trustees will be responsible for all operations of ColoradoCare; establish a purchasing authority for pharmaceuticals and medical equipment; establish separate ombudsman offices for beneficiaries and providers; establish and fund an office to prevent and investigate fraud; establish rules and procedures to ensure financial sustainability; ensure beneficiary confidentiality while allowing for research of ColoradoCare's database; oversee financial management, transparency of operations, and maintenance of patient privacy; and ensure beneficiaries' access to quality care. Health Benefits: Comprehensive benefits must include primary and specialty care; hospitalization; prescription drugs and medical equipment; mental health and substance use services, including behavioral health treatment; emergency and urgent care; preventive and wellness services; chronic disease management; rehabilitative and habilitative services and devices; pediatric care including oral, vision and hearing services; laboratory services; maternity and newborn care; and palliative and end -of -life care. Additional benefits can be provided. ColoradoCare replaces the medical portion of Workers' Compensation There will be no deductibles. Designated primary and preventive care services have no co -payments. Any other co -payments or cost-sharing must have ColoradoCare's prior approval and can be waived to ensure access to proper care. ColoradoCare will assure statewide access to emergency and trauma services. Beneficiaries will choose their primary care professionals. Beneficiaries temporarily living or traveling in another state will receive coverage. Delivery of service: ColoradoCare will assume payment for health services in a manner designed to minimize disruptions to current delivery and payment systems; will phase in payment reforms and a billing system; and use payment models that optimize quality, value, and healthy outcomes. Providers may continue to be for- profit, non-profit, public, private, salaried or independent. Funding In order to assume responsibility for the financing of health care in Colorado, the Board will seek all necessary waivers, exemptions, and agreements to receive all available state and federal health care funds. The Colorado Department of Revenue will collect transitional operating fund taxes (TOFT) from residents beginning July 1, 2017 at the following rates: 0.6 % of payroll from employers, 0.3 % of payroll from employees, and 0.9 % from non -payroll income. The month prior to ColoradoCare's assumption of responsibility for health care payments, the Department of Revenue will cease collecting TOFT and will collect and transfer premium taxes (PT) to ColoradoCare as follows: 6 2/3% of employer payroll; 3 1/3 % of employee payroll; and 10 % non -payroll income. As taxes, the amounts are deductible when filing income tax forms. For both TOFT and PT much of Social Security and pension income would be exempt as defined by tax law. Income taxable for premiums will be capped at $350,000 for individuals and $450,000 for those filing jointly, with annual adjustments for inflation. Employers may choose to pay part or all of their employees' share of TOFT or PT. ColoradoCare will serve as a supplemental plan to Medicare and will apply to become a Medicare Advantage Plan. For any other health insurance plans that are in effect, ColoradoCare will be a secondary payer, up to the payment level of ColoradoCare coverage. ColoradoCare must undergo annual independent audits. Additionally, the Board will publicly report on the financial state of ColoradoCare and present options for economies, benefits, refunds, reserves and premium adjustments. Premium Taxes may not be increased more than once per year and only if the majority of voting Colorado members approve the increase. Exemption: ColoradoCare is exempt from TABOR. Enabling Legislation: During the 2017 legislative session the General Assembly will pass legislation to ensure a smooth, lawful transition to ColoradoCare. This includes transferring the resources of the Health Benefit Exchange, and the responsibility for Medicaid, Children's Basic Health Plan, the medical portion of Workers' Compensation; and allowing ColoradoCare to receive funding provided by the Affordable Care Act. For more information contact: info@ ColoradoCareYES.co jvww.Colo rad oCareYES.CO initiative summ 11.22.15 ColoracioLare %ACV g,., - . V:"7 ColoradoCare is good for rural Colorado. ColoradoCare: ❖ Will attract an adequate health care workforce to all areas of the state. "ColoradoCare may provide funding and other support to improve access to health care services for all beneficiaries regardless of where they live in Colorado." To provide health care access in rural areas, the ColoradoCare Board of Trustees can provide incentives and programs to assure an adequate health care workforce for specific community needs. These may include: ✓ Incentive pay for services delivered in underserved areas. ✓ Specialists to travel to serve and maintain consultation relationships with rural clinics and provide tele - health services. ✓ Infrastructure subsidies for community-based medical facilities including urgent care (non -emergency) ✓ Customized community solutions. ❖ Assures that all residents have comprehensive health care and has funding to expand dental and vision services if the Board of Trustees approves. ❖ Assures that health care is affordable. No discrimination by region. All residents will pay the same premium tax percentage. The only exception will be Medicaid enrollees who will not pay a premium tax. Seasonal employees (ski area employees, construction employees) would be covered between jobs. ❖ Assures representation of rural Colorado communities through a regionally elected Board of Trustees. A 21 -member Board would run ColoradoCare with members chosen by voters under clean -election rules. Three members would be chosen from each of seven districts in Colorado. Two or more of the seven districts would have substantial rural representation. ❖ Guarantees family farmers, ranchers and other rural employers can afford health care for themselves and their employees. ColoradoCare would require a 6.67% payroll premium from employers and 3.33% payroll premium from employees. ✓ A 6.67% payroll premium is more affordable than most insurance for employers. ✓ The medical portion of workers' compensation insurance (approx. 59% of workers' comp) would be eliminated. For some common rural jobs such as construction and agricultural work, the workers' compensation costs are substantial and can be almost as much as 6.67% of payroll. ✓ Employers would no longer be burdened with the responsibility of managing employee health care. ✓ Self-employed residents would pay less than 10% based on their tax bracket. ❖ Includes systems already known in rural Colorado. ✓ In many ways, ColoradoCare is modeled after Rocky Mountain Health Plans, a program developed in Grand Junction that serves a large rural community. ✓ Between 1935 and 1955, the cooperative business model brought electricity to rural America when the corporate electric power giants did not find it profitable enough to serve rural areas. The current health care system, designed in Washington DC under the influence of the insurance lobbyists, has again failed rural communities. ColoradoCare is a chance for the Colorado community to create its own solution. ❖ Decreases overall health care costs in Colorado so that health care is fiscally sustainable ✓ In 2019, ColoradoCare is projected to decrease overall costs of health care in Colorado by $4.4 billion and decrease Colorado's total employer business expenses by $3.8 billion. Mural areas/MSW/2016 • ColoradoCare YES• ColoradoCare Benefits • Outpatient services for both primary and specialty care • Emergency and urgent care services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, including behavioral health treatment • Prescription drugs and durable medical equipment • Rehabilitative services and services that help patients acquire, maintain, or improve skills necessary for daily functioning and the devices needed for these services • Laboratory services • Wellness, including integrative and some alternative medicine • Chronic disease management • Pediatric services, including vision and hearing care • Dental care for children and low-income people over 60 • Palliative and end -of -life care • Local health care services when temporarily in another state (residents, ColoradoCare beneficiaries, include students and others who continue to list Colorado as primary residence, pay taxes here themselves, or are a dependent of a resident) • No annual dollar cap on services • No deductibles • No copayments for most preventive and primary care; • Services regardless of whether illness or injury occurs at work, in an accident, or otherwise • When Medicaid eligible, and in some other circumstances determined by the Board of Trustees: ■ Home health services ■ Children with autism ■ Telemedicine ■ Adult vision ■ Adult dental ■ All other programs connected with Medicaid funding by federal or state statues ,would be continued as conditions of the Medicaid waiver. The minimum benefits listed above are set by the initiative and the waivers that the ColoradoCare is required to obtain from the Affordable Care Act and Medicaid. The Board of Trustees, acting on the wishes of members, is empowered to increase benefits as it determines funds are available. www. ColoradoCareYES.CO v2.1.7.31.15 • .OD. ColoradoCare Endorsement Statement for ColoradoCare ColoradoCare is a citizens' initiative, to be on the November, 2016 ballot. ColoradoCare is a health care payment system, run by locally elected board of Trustees not the government; it provides for quality, affordable, lifetime health care for everyone in Colorado. Because it is designed in Colorado to cover health care for every Colorado resident and will save billions, we want to be listed as an organization that supports ColoradoCare. Name and Title Organization_ Address Email Phone Website if you are willing to be linked to ColoradoCareYES.co For more information, please go to: ColoradoCareYES.co You may send this form to bsemple@ColoradoCareYES.co or Bill Semple, 575 Mulberry, Louisville, CO 80027 Ccyorganizationendomement5/5/15wgs