YES Campaign Disputes CHI’s Assumptions about Medicaid Funding, Spending Reductions.

ColoradoCareYES is pleased that an analysis by the Colorado Health Institute (CHI) found that ColoradoCare, a proposed universal health care system for the state on the November ballot as Amendment 69, “…would be able to reach its goal of saving money in the health care system by cutting billions of dollars in administrative costs and insurance company profits.”

The independent analysis finds agreement with ColoradoCare’s conclusions that a universal health care system would cost Colorado families less than the current corporate insurance model, and the report validates ColoradoCare’s economic model.  The CHI report, however, makes unrealistic assumptions about Medicaid Funds available through a state wiaver, and the ColoradoCareYES campaign takes issue with CHI’s speculation on reduced federal funding. 

“We appreciate the thoroughness and quality of the CHI analysis,” said ColoradoCareYES Executive Director Ivan Miller. “They used different methods and assumptions than the analyses by economist Dr. Gerald Friedman and still had roughly the same conclusions, except in two very important areas where we have strong disagreement.”

CHI’s inexplicable omission of even the most conservative figures for decreasing health care spending — and their unreasonable assumption that Medicaid funds would be reduced by $4 billion under a waiver — account for significant miscalculations in their estimation of ColoradoCare’s financial viability.

“Since the implementation of the Affordable Care Act, the federal government has exhibited unprecedented flexibility in granting state waivers for Medicaid demonstration projects,” said Senator Irene Aguilar, MD, outlining the reasonable expectation that that the federal government would maintain its level of Medicaid funding.  “The major requirements are that the program promotes the objectives of Medicaid and maintains Federal budget neutrality. ColoradoCare’s Medicaid Waiver requests would remove barriers to access currently experienced by consumers and align incentives to improve quality while decreasing total health care spending.”

In addition, Friedman asserts that CHI markedly underestimates ColoradoCare’s ability to control rising health care costs. While the current corporate insurance system resorts to raising premiums and deductibles every year to meet rising costs, ColoradoCare gets to the root of the problem by implementing a system that reduces those costs.  

“Even critics of a single-payer plan, such as Kenneth Thorpe and the Urban Institute, say it would slow the growth of health care inflation by at least 0.5% a year,” said Dr. Friedman.

“If CHI had considered increased savings over time and the full Medicaid waiver, it would have found that our model is viable and sustainable,” said Miller. “With private health insurance premiums expected to rise by as much as 40% next year in Colorado, we know insurers anticipate an ongoing pattern of unsustainable premium increases on an annual basis. ColoradoCare is our opportunity to counter that trend and bring relief to Coloradans.”

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