May 25, 2017

ED MORRISSEY: California’s looming single-payer disaster.

An analysis from the Colorado Health Institute showed that their state’s ColoradoCare proposal would start off with a deficit of over $200 million in its very first year of full operation, even with a three-year headstart on new taxes to launch the system. By the end of the tenth year, the cumulative red ink would have exceeded $7 billion — which would be more than twice the state’s annual GDP.

The solutions for this fiscal meltdown in a single-payer system, CHI noted, were all unpleasant. One option would be to cut benefits of the universal coverage, and hiking co-pays to provide disincentives for using health care. That would in some cases “reduce the level of insurance below what [Coloradans] have today,” the study noted. The state could raise taxes for the health-care system as deficits increased, which would amount to ironic premium hikes from a system designed to be a response to premium hikes from insurers. Another option: Reduce the payments provided to doctors, clinics, and hospitals for their services, which would almost certainly drive providers to either reduce their access or leave the state for greener pastures.

If California goes ahead with this, the exodus of health care providers will be met with screams from Sacramento of “I need wider powers!”

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