Amendment 69 proposes replacing Colorado's current healthcare system with a single-payer system called ColoradoCare, funded through new taxes. It would impact companies, individuals, and families in Colorado significantly. It is estimated to cost $38 billion in its first year, with funding coming from new payroll and income taxes on employees, employers, and residents. These tax increases are expected to harm Colorado's economy by penalizing small businesses and potentially causing high-quality doctors and specialists to leave the state. ColoradoCare also poses risks of being unable to fund healthcare if costs exceed tax revenue collected and having no ability to run deficits or borrow funds.

1. Amendment 69:
How ColoradoCare Would Impact Companies,
Individuals, and Families
September 2016 • Lockton Companies
L O C K T O N C O M P A N I E S
ED PIERCE
Vice President
Lockton Mountain West
303.414.6112
epierce@lockton.com
At Lockton, we work with employers across the country and around the
globe. Many of those employers have employees in the state of Colorado.
On behalf of those employers, we want to share background and
perspective concerning Amendment 69, also known as ColoradoCare.
This paper focuses on the facts and downstream ramifications we
envision if ColoradoCare were to pass.
BACKGROUND
Amendment 69 proposes a government-run, single-payer healthcare system
that would replace the following:
™™ Employer-sponsored and individual health coverage
™™ Medical portion of workers’ compensation
™™ Medicaid
™™ Child Health Plan Plus (CHP+)
Essentially, Amendment 69 would refinance the entire healthcare system in
Colorado, effective January 1, 2019.
As an amendment to the Colorado constitution, it would be very difficult
to change. It would be run by a 21-member panel—untethered from the
accountability or regulation of state government. Colorado voters will
decide on the amendment on November 8, coinciding with the presidential
election when voter turnout is typically high.

2. 2
THE NUMBERS
Amendment 69 is expected to cost about $38 billion
in the first year. We expect that dollar amount to escalate
significantly after year one. An estimated $25 billion
of the $38 billion would come from the taxpayers of
Colorado, and the remaining $13 billion would come
from the state and federal government (largely money
we already receive to run Medicaid and CHP+).
One nonpartisan source, Colorado Health Institute,
has estimated that the program will start in the red and
exceed a $7.8 billion shortfall by year ten. These taxes
are collected in four main ways (one does not preclude
another):
1. 3.33 percent tax on all employees who earn a
paycheck in Colorado, including low-wage earners.
2. 6.66 percent tax on all employers on their entire
Colorado payroll. This would be for companies with
headquarters in Colorado or not. Any employer with
even one employee in Colorado would pay the tax
on each Colorado employee’s pay.
3. 10 percent tax on any person’s income outside
of his or her paycheck. This would include sales of
property, dividends, K-1 earnings, interest collected
on savings, capital gains on sales of equipment or
assets, and state income tax refunds.
4. 10 percent tax on retiree income. Yes, retirees,
who are likely on Medicare, will have to pay a new
tax for a benefit that they will never touch. Taxes are
expected to start after the first $24,000 in retiree
income, excluding some portion (the amendment
language is not clear about what “some” means) of
Social Security, pensions, annuities, and IRAs.
These taxes have not been indicated to be tax-deductible
like group health insurance premiums are.
In this fiscal year, the Colorado state budget is
approximately $27 billion. The impacts of passing
Amendment 69 are far-reaching and potentially
catastrophic for Coloradans and our, as of now, vibrant
Colorado economy.

3. September 2016 • Lockton Companies
3
Some of the most troublesome impacts to Coloradans and our clients with Colorado employees are as follows:
Business and Colorado Economic Impacts
™™ Small business owners would be penalized even
more than larger companies. Eighty-two percent
of Colorado businesses have a “pass through” tax
structure (S-corp, LLCs, and sole proprietors, for
example). These business owners would have to pay
the tax TWICE—once on their payroll and once on
all earnings that they recognize themselves.
™™ Entrepreneurialism is ingrained in the spirit of
Colorado. A double taxation on the large majority of
Colorado business owners threatens the likelihood
of businesses opening in Colorado.
™™ Even nonprofits and government entities would be
subject to the payroll tax. Many nonprofits would
struggle to operate if they had a new 6.67 percent
tax to pay.
™™ Businesses generally do not have all of their
employees enrolled in the company-sponsored
plans. Under ColoradoCare, all employees are used
to compute the tax. Therefore, a company that had
50 percent of its employee population participating
in the benefit plan now will have to pay the tax not
on 50 percent, but on 100 percent of its employees.
™™ The tax-deductibility of the ColoradoCare tax has
not been determined. Without it, individuals and
employers lose the large tax-deductibility of the
current health insurance premiums they now enjoy.
™™ Many Colorado businesses would have employees
with different benefits. ColoradoCare would be in
place for the company’s Colorado employees, and
the company would need another plan in place for
those outside the state.
™™ According to the IRS, S-corps had a profit margin
of about eight percent across the country in 2013.
If new significant taxes are levied, some of these
business will be challenged to thrive.
™™ Workers’ Compensation: The proponents of A69
claim a reduction in workers’ compensation costs.
However, ColoradoCare won’t have mechanisms in
place to do all the things that a carrier does: work
with employers to keep workers safe and minimize
the potential for injury and work with physicians to
ensure injured workers get back to work in a timely
and safe way. As a result, workers may be away from
their jobs longer, and wage replacement costs for
employers will increase.
Impacts on Individuals and Families
™™ An individual’s payroll tax would increase by
72 percent, from 4.65 percent to 7.98 percent.
™™ Poor or “working poor” households would be most
at risk. If ColoradoCare fails to be a successful
system, children on CHP+ and those on Medicaid
would lose.
™™ Amendment 69 would usurp the ability of an
individual to get premium assistance for coverage
(whether from an employer or the government). In
many instances, that financial help pays for a large
majority of that person’s premium obligation. A
tax on that person as opposed to assistance to get
coverage could be unfairly punitive on the poor or
working poor.

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™™ The payroll tax will hit dual-income households particularly hard. A dual-income household often chooses to buy
family members’ health insurance through one or the other of the spouses’ employers. Under Amendment 69,
both earners pay the tax—there is no choosing.
™™ Provider compensation is not specified in the amendment. If physician compensation is negatively impacted
Colorado would risk high-quality doctors departing the state. This could decrease overall care standards.
Specialists are a particular flight risk. If a specialist can make considerably more money outside of Colorado, he or
she may be well incentivized to leave the state. For example, Children’s Hospital of Colorado is concerned about
the ability to attract and retain the best physicians and researchers.
™™ Healthcare providers do not have to accept ColoradoCare. A reasonable fear is that the best doctors in Colorado
will simply become “concierge” physicians and will only accept payments from those who can afford to pay their
fees. This dynamic would separate those who can pay and the rest of Colorado residents who will have no choice
but to rely on ColoradoCare. One of the strengths of our current system is that residents largely have access to
the same physicians, regardless of economic status.
™™ Coloradans will likely suffer lack of investment in other priorities. Colorado already struggles to fund needed
infrastructure projects, K–12 education, and higher education. Coloradans are unlikely to support tax increases for
these three challenged areas once a massive new (and apt-to-grow) tax is implemented for ColoradoCare.
™™ ColoradoCare has no ability to run a deficit, and it does not have the ability to borrow or otherwise fund any
shortfall of funds. The results could be to stop paying benefits, stop paying doctors and hospitals, or immediately
cut benefits to Coloradans.
™™ There is nothing in Amendment 69 to prevent very sick people from coming to Colorado from other states to
obtain free medical care and then leaving after treatment. Coloradans would be stuck with the bill for these
non-Colorado residents.

5. September 2016 • Lockton Companies
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We are publishing this piece because we care
about the state of Colorado and its residents,
and we care about our clients.
If you would like to learn more, please contact
your Lockton Account Team.

6. © 2016 Lockton, Inc. All rights reserved.
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