Guest opinion: ColoradoCare threatens workers’ comp system
I’ve been saying for months, along with other Colorado business leaders, that Amendment 69 is a bad idea. The effort to create a single-payer health-care system, called ColoradoCare, would have a profound and disastrous effect on the state, including my area of concern, workers’ compensation insurance.
Now, there’s new evidence that ColoradoCare would cost more money than it would ever generate. A recent study by the independent Colorado Health Institute pinpoints that Amendment 69 would scarcely raise enough money in its first year to cover existing medical costs, and in 10 years would be $10 billion in the hole.
All of these costs would be paid for by ever-increasing payroll taxes on both employers and employees as well as by taxing non-payroll income.
Clearly, every Coloradan will be affected if ColoradoCare is passed in November, but the impact on employers, injured workers and the entire workers’ comp system may be even more dramatic.
We know that Colorado’s workers’ compensation system is one of the best in the nation because of the way it effectively balances reasonable premiums for employers and fair benefits for injured workers. The system helps retain business and lure new employers with its stability and financial security, making it a prize in state’s impressive economic trophy case.
But that stability would be shaken by ColoradoCare. Under current law, workers’ comp insurance covers the health-care needs of injured workers and replaces their lost wages, or indemnity, for as long as they are out of work. But by bringing the medical payments of workers’ comp under its umbrella, ColoradoCare would strip injured workers of a highly effective medical care system. The system ensures injured workers receive high quality care in a timely way from physicians who specialize in occupational medicine, and gives them opportunity to safely return to work.
Workers’ comp is extremely complex, which is why California and Vermont – the only other states to seriously explore (and ultimately back away from) single-payer health care – excluded workers’ comp from their proposals.
Amendment 69’s backers say that integrating workers’ comp into ColoradoCare will save Colorado businesses money because their workers’ comp costs will go down.
We expect, though, that any workers’ comp savings will be eroded quickly by lower worker productivity and increased wage replacement costs. That’s because ColoradoCare won’t have mechanisms in place to do all the things many workers’ comp insurers do, including working with employers to keep their employees safe and minimize the potential for injury, and working with doctors to help injured employees get back to work in a timely and safe way. Even things like paying for injured workers to travel to and from doctor appointments are not accounted for in ColoradoCare.
And that’s not the only way ColoradoCare would diminish service and increase costs. Currently, when a workplace injury is caused by a third party, workers’ comp insurers can seek to recover money from that third party through a process called subrogation. But Amendment 69 would give ColoradoCare first rights to subrogate, weakening workers’ comp insurers’ ability to collect for lost wages. That would result in millions of dollars of otherwise recoverable money not being refunded to Colorado employers every year.
Amendment 69 also does a disservice to Colorado employers because, by leaving work comp insurers with only wage replacement, it eliminates insurers’ ability to manage costs. That would lead to many insurers leaving the state, destabilizing the entire system. Employers will pay the price.
As a political subdivision of the state, Pinnacol cannot donate corporate money to campaign for or against a ballot initiative. However, we can take a position on an issue such as this that directly affects us, and our board has voted to oppose Amendment 69.
Colorado has proven it can make workers’ comp work for employers and injured employees – let’s not shake it up with the cost and uncertainty that would come with ColoradoCare.
Phil Kalin is president and CEO of Pinnacol Assurance.