Following the collapse of Colorado’s health care co-op, created under the Affordable Care Act, and a period of deep uncertainty for the insurance exchange established under the same law, the state appears to be throwing in the towel on the president’s signature legislative achievement. Unfortunately, however, the Centennial State is not interested in implementing free market reforms, but will instead vote on a ballot measure to establish a single-payer health care system within its borders. Coloradans collected more than 150,000 signatures to put the idea—going under the name of ColoradoCare—on the November, 2016 ballots as “Initiative 20.” The proposal would be funded by a new 10 percent payroll tax.
This should not be surprising to anyone who has been paying attention. The insurance exchanges seemed almost designed to fail, relying as they did on large and continuous taxpayer subsidies simply to function. Insurance companies can’t afford to cover the people they’re required to cover without being propped up with government dollars, and when they don’t get those dollars—as they recently learned they would not—they are forced to raise their premiums to compensate for the losses. The exchanges are already experiencing lower than expected enrollments, and higher premiums, creating the insurance death spiral that feeds on itself until the whole system collapses.