• Town Talk

The question for today is whether the rule of law has any meaning if legislatures redefine language at their pleasure and no one bothers to call them to account for it.

The state House has passed HB 1293, a tax on sick people. The bill directs hospitals to add a “fee” of up to 5.5 percent on every patient’s bill, keeps the fee secret by prohibiting hospitals from listing it separately, and reimburses hospitals on the basis of what they say their costs are.

Those supporting HB 1293 pretend that this is a fee on hospitals. They say hospitals will pay this fee, something that can be true only if hospitals have large pots of surplus funds lying around.

Who will pay?

If hospitals are as poor as their legislative supporters say they are, then the additional funds must come from somewhere other than hospitals. And, as is obvious to everyone who isn’t in the legislature or the governor’s office, hospitals will raise their patient charges or reduce the quality of patient services to collect this fee.

In short, the sick will pay.

In the normal world this “fee” is called a provider tax. It, like any garden variety sales tax, taxes services purchased by private buyers.

Under Colorado law, the Taxpayer’s Bill of Rights requires that politicians ask the voters before raising taxes. Unfortunately for hospitals and the legislature, voters probably would not vote to force sick people to pay hospitals an extra $600,000,000 a year.

What’s a politician to do? Wave the magic language wand, and all taxes become fees. Who needs voters and their burdensome constitutional amendments anyway?

How this tax money will be used is a short course in the kind of legislative behavior that TABOR requirements limit. When free of TABOR, state government is more inclined to pillage taxpayers for the benefit of its special interest friends, in this case the nominally non-profit hospitals that are some of the biggest businesses around.

The more than $600,000,000 a year in tax revenues wrested from sick people will be funneled directly to these hospitals. The conduit is a fund nominally controlled by the state, but advised by an “advisory board.” A majority of its members either work for hospitals or are friendly political appointees.

The legislators who introduced this bill have protected taxpayers from hospital self-dealing by trusting hospitals to tell the state what their true and unpadded costs are.

The truth of the hospital statements will be reviewed by the advisory board using documents that will not be open to public inspection.

The payoff to the state for supporting this legislation is that some of the money will go to the state Department of Health Care Policy to finance vaguely specified “administrative costs.” Some “may” also go to a “group facilitator,” suggesting that someone outside of government can expect a tidy payment when the bill passes.

The leftovers will be used to expand Medicaid and Colorado’s child health insurance. It enrolls children in a tax funded health plan for $35 a year at taxpayer expense. Nationally, an estimated 60 percent of the children newly enrolled in programs like CHIP dropped private health insurance to do so, demonstrating that parents recognize a deal when they see one. In Hawaii, a similar program to cover all kids lasted just seven months before it went under due to unsustainable costs.

More affordable health care?

The ultimate irony in all this is that HB 1293’s sponsors upped the ante on their language perversion by claiming that the magic fee that increases the cost of private sector health care to the tune of $600,000,000 a year “makes health care more affordable.”

They even named HB 1293 the “Colorado Healthcare Affordability Act.”

For this legislature, bigger government and higher fees translates into more affordable living both for it and for its big business friends.

If it gets rewarded for its tax into fee prestidigitation and its “affordability” act, voters should expect the future to bring such affordability measures as income taxes transmuted into job privilege fees, increased sales taxes transmuted into transactions fees, and constitutional protections transmuted into therapeutic suggestions.

Linda Gorman is the director of the Health Care Policy Center for the Independence Institute, a Golden-based libertarian think tank. Respond to this column at editor@thedenverdailynews.com.

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