Colorado Democrats unveil their plan for reducing health care costs or creating a public health insurance option

Colorado Democrats unveiled a public insurance option bill Thursday for the second year in a row, although a state-run insurance plan may not come to fruition if health care providers meet the bill’s goals for reducing the cost of insurance.

The goal is to help Coloradans who buy insurance on the individual or small-group markets, as well as increase competition in counties where there is only one health plan on the marketplace. Sponsors believe that’ll give consumers have a choice and insurers more of an incentive to lower costs.

This year’s version is significantly pared down from last year’s, which would have created a public-private health insurance option rather than a phased approach. And there are additional concessions to the health care industry that vary even from the draft released at the beginning of the month.

“I think given what’s happened in the world with COVID over the last year and the feedback we got from all different types of stakeholders and different communities across the state that this is the responsible and reasonable way forward on this issue,” said sponsor Rep. Dylan Roberts, an Avon Democrat.

If passed as written, the legislation would create a standard insurance plan that insurance companies could choose to offer through the Connect for Health Colorado marketplace for individuals. If a zip code doesn’t have at least two insurance companies offering that standard plan — or if insurers don’t meet targets for reducing monthly premiums (a 20% reduction in costs by 2025) — the state could step in and in 2025 sell its own “Colorado Option Health Benefit Plan”  to individual and small group markets.

Republicans opposed the effort last year, and in a January speech, Senate Minority Leader Chris Holbert of Parker said his caucus would continue to fight against a public health insurance option.

The broader opposition has already started with ads against the bill starting last year running and funded by Colorado’s Health Care Future and its national group, Partnership for America’s Future.

Amanda Massey is the executive director of Colorado Association of Health Plans, which represents health insurance companies. She said the bill is set up for health plans to fail, because there’s no evidence to suggest whether the target goal of reducing costs 10% annually for two years is feasible.

“That target is being set off of one plan that currently exists and will be measured on a yet-to-be-determined standardized (state) plan that does not yet exist,” she said. “And that standardized plan will likely have more benefits and be more expensive.”

Although bill sponsors acknowledged the new plan may not go as far as some progressives wanted, it’s a step to reducing health care costs. The bill also allows for an exemption for certain health care providers that can prove the plan will hurt them to the point they won’t be able to take Medicaid patients.

“The reality is is that access to equitable access to quality health care for everyone, regardless of your zip code, race, or residency status is an epidemic that we are facing in addition to a global pandemic,” said bill co-sponsor Rep. Iman Jodeh, an Aurora Democrat.

The Colorado Hospital Association heavily opposed last year’s bill, and though the group said it applauds the market-driven approach in the first phase, it also believes the targets set are not reasonable or evidence-based.

“Phase Two … provides too much authority to the state and will cause too much uncertainty,” the association wrote in an email. If triggered, it could significantly damage health care access and quality for years to come.”

But sponsors say the plan will help small businesses and individuals and is something Colorado voters support to reduce costs, allowing more people to get insurance. And Roberts said this will not long address the “root cause of rising health care costs” but also take health care providers “at their word because they said they should be given the opportunity to reduce costs at their own.”

This is a developing story and will be updated.

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