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January 02, 2012 06:36 PM UTC

Coffman thinks Colorado should get into the catastrophic health-insurace biz?

  • by: Jason Salzman

( – promoted by Colorado Pols)

You don’t have to spend much time on Google to find out Rep. Mike Coffman hates Obamacare and has voted to repeal it, though he says he likes parts of it.

But what’s Coffman’s alternative, beyond vagaries about wanting to make the health-care market more competitive?

You have to look hard, but one of his suggestions, as articulated in a 2010 radio interview, is to get the state of Colorado into the catastrophic health-insurance business.

Yes, you read that right.

Coffman believes that “Colorado could come up with a great health insurance plan that would focus on catastrophic care.” This plan, under Coffman’s proposal, would be snapped up by health-insurance buyers nationally and bring a windfall of business (and tax revenue) to our state, creating, if you will, a mini catastrophic health-care economy here.

(Coffman may be thinking of a Colorado company, not the state, but Coffman did not correct the radio host when he seemed to interpret Coffman’s statement as I did. And even if this is a private sector proposal, it raises many questions requiring explanation.)

Central to Coffman’s plan is our state’s existing tax on health-insurance premiums. Coffman envisions a windfall of tax revenue from this “premium tax” as sales of catastrophic health-care policies soar.

And if you’re wondering how this could possibly constitute an alternative to Obamacare, here’s your answer: Coffman proposes using the tax dollars collected from the premium tax to help lower the costs of health insurance for “people that have chronic health care needs that are just priced out of the market.” (Everyone else apparently should buy a catastrophic plan, with a deductible appropriate, depending on individual circumstances.)

Oh, and some of the new tax revenue would boost Colorado’s general fund.

Now this proposal of Coffman’s has got to catch the attention of more journalists than a measly progressive one like me.

Conservative journalists will want to know more about why Coffman wants to get the government into the health-insurance business, and why he wants to expand the state’s general fund. Business reporters will want to know how the government of Colorado will compete with the private sector. Health reporters will want to know if the chronically ill would really be able to better afford insurance, under Coffman’s proposal to help them, and whether catastrophic care will work for many people. Political reporters will want to know if Tea Party activists would turn against Coffman for advocating a government expansion into health insurance. Legislative reporters will want to know how much of the state’s budget hole could be filled and whether Colorado’s law mandating basic standards of care for catastrophic plans would be overturned in the state legislature, since part of Coffman’s proposal involves deregulating the state health insurance industry.

I mean, there’s plenty of feed here for the media beast.

But apparently no one’s dug into his idea since Feb. 22, 2010, when Coffman said it on KHOW’s Caplis and Silverman show. Here’s the transcript from which the quotes above quotes from Coffman were taken:

Coffman: What we need is market competition. The President is right when he says there is inadequate competition among private insurance companies. But we do that through government regulations. We say that you cannot purchase health insurance across state lines. It has to be somebody that is licensed in your state. I think that if we opened up the market, if we could deregulate it some, and I think the role of the insurance commissioner is to make sure that these policies are transparent and that they cover what they say they are going to cover. But if we could open up market competition. When I was state treasurer, I  looked and wondered why all the publically traded corporations were moving out of Colorado and incorporating in the state of Delaware. And it turns out that Delaware had a court system that specialized in hearing business cases. And I think they provided a better environment, even though they charged a lot more for their incorporation.

I think if Colorado could come up with a great health-insurance plan that would focus on catastrophic care and opened it up to the rest of the country, if in fact we opened up the market, and we charge a premium tax here. Part of that goes to the general fund but part of it goes to cover a high-risk insurance pool with people that have chronic healthcare needs that are just priced out of the market, and we subsidize that here in Colorado, we could bring down the cost further. If we could sell a policy that would appeal to the country that would be more cost competitive, and other states could do the same. Let’s open it up to competition. [BigMedia emphasis.]

Craig Silverman: Isn’t that part of the deal behind the public option? Make the insurance companies compete with government?

Coffman: Well, what the public option says is, we are not going to do the deregulatory parts that I mentioned that allows competition across state lines. So we are just going to leave it in place and now we’ll say that the only one that can provide competition is the government? No, we need to open up competition to the private sector to bring down prices.

Dan Caplis: Congressman Mike Coffman our guest. And doesn’t this go back to the lead question that I had for you, which is the idea of the federal government now being able to dictate rates for private insurance companies. Because behind this, can’t the intellectually honest agree, that the left for a long long time, and now they are in control of the Democratic Party, has been out to kill private insurance companies, health insurance companies, and replace them with a single-payer government-provided health insurance plan? Isn’t that their holy grail and wouldn’t this be a big stem toward that?

Coffman: Yeah, it really would. And let me tell you one other thing. There are some real constitutional questions here. The notion that the federal government can impose an individual mandate. Certainly I think states can do it constitutionally, but I don’t see where in the U.S. Constitution it gives the power to the federal government the power to do that.  I think that there are other constitutional questions about the power of the federal government to do the things we are taking about doing. And clearly we understand the Commerce Clause and what is involved in that. I think that there are aspects in this legislation that clearly goes beyond that….

Silverman: Hey Congressman, what is the argument offered for not allowing competition state-to-state?

Coffman:  Well, I suspect that the argument would be this: In 1946, the Congress of the U.S. pretty much gave, if you are not a multi-state employer that falls under the exemption, then you are subject to state regulation, particularly in the small group market and the individual market. Each state has different criteria, and so I think that they are saying there would be a race to the bottom if you opened up the market? And a given state had a catastrophic policy without all the bells and whistles. First of all, I think that we insure for much too much. I mean, insurance is about the providing oh…

Caplis: Catastrophic-type coverage.

Coffman: Yeah, really for catastrophic. And so, the fact that we’ve gone beyond that where people don’t have skin in the game.

I found this interview as part of my year-end review of Coffman’s talk-radio appearances, which I’m doing to encourage media types to take another look at some of Coffman’s unexamined views now that he’s in a competitive district.

Leading Democrats and Republicans have said competitive districts make politicians more accountable. One way that plays out in the real world is that when Congressmen like Coffman throw out big ideas, like the one about getting Colorado into catastrophic health-insurance business, he’s more likely to be questioned about it. Now it’s up to the media to do their part.


4 thoughts on “Coffman thinks Colorado should get into the catastrophic health-insurace biz?

    1. In my recent posts on Coffman, I’m criticizing 1) talk radio hosts for letting Coffman slide by so easily without questioning and 2) other media types for not illuminating Coffman more thoroughly for us, especially now that his district is competitive.

  1. is that it is catastrophe oriented instead of providing affordable universal routine healthcare, the case in every other modern, industrialized western nation and many more besides, to help avoid the catastrophic in the first place.  We already have the Universal Catastrophic ER plan. It sucks.  

  2. I’m very much in favor of single payer, because it has 5% overhead instead of 25%, but there are compromises that don’t screw people.

    Health insurance solves three risk factors:

    (1) Accidents and unexpected Major Medical Events

    (2) Health differences across demographics like age or occupation.

    (3) Prepaid Health Care, like 2 dentists per year.

    Numbe (3) Prepaid medical is best solved by community-based or long-term health organizations. This was the promise of HMO’s that got ruined by profit maximization strategies.

    Private Insurance screws us all on number (2) because they profit by denying coverage to higher-risk groups. The only way to that screwing us is to insist on universal access, meaning automatic enrollment via the tax system, prohibiting denials, and/or mandates.

    Private Insurance companies could actually handle number (1) in an honest way, as there is minimal incentive to game the system; statistics is relatively predictable.

    So, it is ironic, that the single insurance mechanism Coffman suggests could be public is the one that private Insurance could actually handle with low overhead.

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