Amendment 69 – A Terrible Idea

StopColoradoCare.com
Prepared by Richard D. Turnquist
toadvancefreedom.com
richard@toadvancefreedom.com
Copyright (c) Richard D. Turnquist 2016 All
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Introduction

• This presentation is about a ballot initiative
titled Amendment 69, which would add an
Article XXX to the Colorado Constitution
entitled “Colorado Care”
• It will give you an overview of what
Amendment 69 is and what it will do. Then it
will present the arguments put forward by the
proponents and highlight their weaknesses
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What is Amendment 69?

• It’s a constitutional amendment. (Read Section 1
Paragraph 2)
• If passed, it would be implemented in 2 phases:

– Within 60 days of becoming effective, an interim 15
member board is to be appointed by the Senate
President and minority leader, the House speaker and
minority leader and the governor.
– This “transitional phase” would last for up to three
years, during which the Interim Board would be
required to schedule an election for a permanent
board, which would consist of 21 members
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What is Amendment 69?

– Once the elected board is in place, Colorado Care is up and
running

• Nature of Interim and Elected Boards

– ColoradoCare divides Colorado into 7 districts, each having
the same approximate number of residents
– Any board member can be removed for cause by a
majority of other board members
– Supposed to be “non-partisan”
– Elected board members are not subject to recall elections
– Vacancies are filled by appointing a new trustee from the
district
– Term limited to 8 years
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What is Amendment 69?

• Board Powers (described in Section 5, page 5)

– Promulgate bylaws, procedures, rules and policies
– Hire an executive team (high salaries – see health coop CEO)
– Establish central purchasing authority
– Provide funds to create new bureaucracy for
“Ombudsman Offices” for beneficiaries and providers
– Establish and fund an office for fraud prevention
– ESTABLISH PROCEDURES FOR ENSURING FINANCIAL
SUSTAINABILITY BY ADJUSTING PAYMENTS AND
BENEFITS
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What is Amendment 69?

• Board Powers (described in Section 5, page 5)
– Allows ColoradoCare to maintain a central
database of medical records
– Administer all state funds for health care services
– Establish an appeals procedure
– Authorize “reasonable” compensation and
expense reimbursements for themselves
– Others including audits, budgets and recordkeeping and “transparency”
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What is Amendment 69?

• Thoughts on the Board

– Instead of market pricing mechanisms, all decisions regarding
healthcare services and providers will be made by this Board
– The Board is not accountable to anyone – not the governor, not the
General Assembly, or anyone else
– Dissenting voices will be purged and only conformist thinking will be
allowed. This board will be highly political, and members will vote in
the interest of staying on the board, not what’s best for Coloradans
– Not subject to recall means that once elected they are in for up to 8
years.
– Elections every four years means that we’ll be having campaigns to
pick our health care overlords
– Four years is a long time, and they can do a lot of damage in that time.

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What is Amendment 69?

• Funding – How will ColoradoCare be funded?
• There will be a “transitional” tax structure:

• The Permanent tax structure:

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What is Amendment 69?
• With non-payroll income, this represents a tax
increase of the Colorado income tax from 4.63%
to 14.63%, or a 216% tax increase.
• During the transitional period, for payroll income,
it represents an increase from 4.63% to 4.93%, a
6% tax increase. After that it increases the tax
rate from 4.63% to 7.96%, a 72% tax increase
• All forms of income are taxed except Alimony and
Unemployment Insurance (see the Income
Section of Form 1040).
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What is Amendment 69?

• The Colorado Care Yes website says that “there is
an exclusion of up to $33,000 (single) or $60,000
(joint)” for non-payroll income, however, there is
no language in the Amendment itself that
supports this statement.
• They try to make it seem as if the 10% isn’t really
10%, but taxes are complex, and their
explanation doesn’t hold water for filers who
don’t itemize their taxes.
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What is Amendment 69?

• Impact on businesses
• All businesses will be paying a 0.6%/6.67% on
all payroll employees. This will “satisfy their
obligation” to pay health insurance for their
employees
• May not impact large, multinational C-Corp
businesses and could even provide a savings if
they drop health insurance as a benefit
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What is Amendment 69?

• Impact on businesses
• However, small business owners (Schedule C
or C-EZ, partnerships, S corporations, etc.) will
be hit twice – first with the payroll tax on
employees and then with their personal
taxable income – to the tune of up to 50.9%
during the transitional period then 10%
thereafter
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What is Amendment 69?

• Cannot opt out. ColoradoCare will be mandatory.
• Regardless of what proponents say, it IS a state
agency and is to be funded through taxation,
which is levied with the implicit threat of force
• It represents almost a 100% increase in the state
budget - $25 Billion against the upcoming fiscal
year budget of $27 Billion
• Other estimates of the cost are up to $38 Billion.
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What is Amendment 69?

• It would be naïve to assume it will stay at $25
Billion. It will most likely increase every year.
When Medicare started in 1966 it cost $3
Billion.
• House Ways and Means estimated it would
cost $12 billion in 1990, in reality it cost $107
Billion, a missed projection of almost 800%!
• Medicare’s budget for 2015 was $526 Billion
(or $52.6 Billion for each state on average)
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Arguments For and Against

• The proponents of A69 talk about a “$4.5 billion
savings over current system”
• This $4.5 billion is a completely fabricated
number. First, it is based on PROJECTED costs
under our current system of $31.2 billion in 2019
– three years from now! – over ESTIMATED costs
of ColoradoCare of $26.7 billion.
• Still expecting to pay out of pocket for dental and
some for medical. Proponents are saying these
would be “free” but the amendment language
does not support that assertion.
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Arguments For and Against

• Proponents say that savings would come from
the following:
– Reducing administrative expenses by $6.2B
– Paying less for durable equipment and
pharmaceuticals by using “bulk purchasing
power”
– Unified billing system would save $0.6 billion

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Arguments For and Against

• Problems:

– None of the numbers used by the proponents on
their website are linked to any reliable source, i.e.
they are IMAGINARY numbers
– The cost of the CEO/CFO/CMO and the rest of the
bureaucracy this would create are not taken into
account – could cost easily the same amount or
more. The 2016-2017 state budget includes
appropriation for Department of Health Care
Policy and Financing of $9.1 Billion
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Arguments For and Against

• Problems:

– The idea of paying less for durable medical equipment
and pharmaceuticals using “bulk purchasing power”
means simply: They think they would be able to
negotiate the prices they want, regardless of provider
costs. If providers would lose money, the products or
services would become unavailable or scarce –
meaning that “rationing” would come into play
– There is no evidence that there is $600 million of
“fraud” involved in the system
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Arguments For and Against

• Benefits promised include “no deductibles, no
co-pays and waived copayments if they would
cause financial hardship”
• They promise savings of $4.5 billion in 3 years
• They project a surplus! of $1.5 billion to offset
future costs. If you believe this…
• Mythical gain of $1.1 billion from (undefined)
tax deductions
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Arguments For and Against

• Employers are promised reductions of costs
for providing employee health insurance of
$3.8 billion, including no more administrative
costs
• Changes the market incentives for the
employer/employee relationship.
• May not impact large employers, but could
have a significant impact on small businesses
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Arguments For and Against

• For Providers, Colorado Care promises

– 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
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Arguments For and Against

• Perhaps the most fanciful claims are:

– By “redirecting” the mythical $4.5 billion in out-ofstate spending to in-state spending, Colorado
would see a net gain of 32,000 jobs in 2019.
– This equates to 32,000 jobs paying $140,625 per
year.
– The proponents give no sources or data to support
these numbers or to define what types of jobs
these would be.
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Arguments For and Against

• I’m a big believer in evaluating proposed
legislation and ballot initiatives in light of the
Principles of Liberty, which are:







Individual Liberty
Personal Responsibility
Property Rights
Free Markets
Limited Government
State vs. Federal Balance of Power
Fiscal Responsibility
Equal Protection/Rule of Law

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Arguments For and Against (10
minutes)

• Amendment 69 violates most of these principles.
• It violates Individual Liberty by depriving
individuals of their property through increased
taxation and freedom of healthcare choices
• It violates Personal Responsibility by eliminating
co-pays and deductibles, thereby removing selfgoverning mechanisms normally provided by
price and having to pay for a service
Copyright (c) Richard D. Turnquist 2016 All
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Arguments For and Against

• It violates Property Rights through increased
taxation and prohibiting providers and
businesses from setting market prices for
goods and services
• It violates Free Markets by its very nature
• Amendment 69 represents a massive increase
in government, which violates the principle of
Limited Government
Copyright (c) Richard D. Turnquist 2016 All
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Arguments For and Against

• It violates the principle of Fiscal Responsibility
“because government cannot provide anything it has
not first taken from the people. Private markets are
subject to competitive pressures on price, services,
products, quality and profitability; the government is
not.”
• I’ve heard it said that Obamacare was designed to fail
in order to make single payer healthcare more
politically acceptable. Colorado is the perfect petri dish
for this progressive goal and I believe ColoradoCare is a
test to see if it can be passed nationally.
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Failures and Problems of Single Payer
HealthCare in Other Places

• In 2010 Vermont elected a governor who ran on a
single payer platform
• “VermontCare” would have imposed an 11.5% tax on
payrolls instead of 6.67%
• The individual income tax rate would have been up to
9.5% on top of the existing 8.95%
• The architects promised cost savings of $0.9 to $1.4
billion by 2019, something the Governor’s fiscal staff
found “not practical to achieve”
• In December 2014, Vermont Governor Peter Schumlin
(Democrat) pulled the plug on VermontCare.
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Failures and Problems of Single Payer
HealthCare in Other Places

• Canada and the UK both have single payer
healthcare
• In Canada’s healthcare system long wait times
for medically necessary treatment is the norm
– on average four and a half months
• In England the wait after General Practitioner
referral can be up to four months
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Failures and Problems of Single Payer
HealthCare in Other Places

• There’s never enough money!

– The UK’s National Health Service is projected to
face budget shortfalls of 30 Billion Pounds ($47
Billion) annually by 2020. The government
responds by…rationing care!
– The number of family practice doctors who appeal
to the NHS to STOP ACCEPTING new patients
doubled in 2013 and nearly 16,000 operations
were cancelled for non-medical reasons
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Failures and Problems of Single Payer
HealthCare in Other Places

• In the UK, as care becomes scarce, British
people take matters in their own hands by
paying out of pocket for treatment – which
allows them to jump ahead on the waiting list.
• This just means that the rich can still get
treatment while everyone else suffers, and
disproportionately hurts lower income
families.
Copyright (c) Richard D. Turnquist 2016 All
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Failures and Problems of Single Payer
HealthCare in Other Places

• I could go on, but…these are the adverse
impacts of single payer healthcare, as
described by the Heritage Foundation:

– Result in substantially lower payments to
physicians and other health care providers
compared to a multiple-payer system;
– Reduce the quality of care by limiting the ability of
physicians to invest in advanced medical
equipment that takes advantage of new
technology;
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Failures and Problems of Single Payer
HealthCare in Other Places

– Limit access to care in the near term, as current
physicians retire earlier or otherwise leave the
profession
– Limit access to care even more substantially in the
long term, as the prospect of lower lifetime
earnings reduces the incentive for talented people
to choose careers in health care; and
– Reduce the rate of medical progress, because
fewer talented people receiving medical training
decreases the supply of talented medical
researchers
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Failures and Problems of Single Payer
HealthCare in Other Places

• Impacts in Colorado

– All of the above; AND doctors will close their
practices and move out of state, reducing access
to care
– Specialists and high-earning physicians will have
their earnings impaired, reducing incentives to
practice and impairing access to care
– Healthcare providers will essentially become
employees of the state, which will impair their
earnings and drive out the best and brightest
Copyright (c) Richard D. Turnquist 2016 All
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Failures and Problems of Single Payer
HealthCare in Other Places

• Impacts in Colorado

– Once healthcare providers become employees of
the state, there will be a drive to unionize, and
then we’d have another public-sector union that
would kill competition, merit based
compensation, demand lavish retirement
benefits, and…
– Be a huge new source of campaign contributions
for Democrats!
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Conclusion

• A Terrible Idea – as I researched and prepared
this presentation, it just became more and
more apparent what a horrible idea this
ColoradoCare is
• NO Republicans that I am aware of support it
• Prominent Democrats including former
Governor Bill Ritter and current Governor
John Hickenlooper oppose Colorado Care
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Conclusion

• Many Democrats support it, including sitting
legislators (Aguilar, Nicholson, McCann,
among others)
• According to Democratic representative Lois
Court in the Denver Post, Senator Aguilar has
asked sitting Democratic state legislators to
remain silent about Amendment 69.
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Conclusion

• Other groups fighting Colorado Care:

– Fight has been led for months by Jonathan
Lockwood and his group Advancing Colorado
– Americans for Prosperity is working against it
– Healthcare Options That Work
– The Denver Metro Chamber of Commerce
– A group of leaders calling themselves Coloradans
for Coloradans led by Bill Ritter and Republican
Treasurer Walker Stapleton are fighting it
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Conclusion

• CALL TO ACTION
• The key to defeating this is to raise awareness.
Talk to your neighbors, co-workers, church
friends, family members, doctors and others
• Give money to the groups fighting this
• Join AFP on a day of action to make calls and walk
neighborhoods
• Get active on social media (Facebook and Twitter)
• Write letters to the editor of various publications
• Write posts for my site StopColoradoCare.com!
Copyright (c) Richard D. Turnquist 2016 All
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