“Option Colorado” Health Insurance Bill Aims To Offer Cheaper Premiums In Areas With Limited Choice In The Market


Only one state in the United States – Washington – has a publicly funded health insurance plan. Democrats think they could make Colorado second. They are reviving the issue in the Colorado legislature for another year of debate on a bill that this time makes concessions to the health care industry.

A bill circulated on Tuesday. The bill’s sponsor, Rep. Dylan Roberts, an Avon Democrat, said there was no specific timeline for its formal introduction, but said he expects “solid conversations. over the next few weeks and changes to be made before the introduction “.

In 2019, lawmakers ordered the state to recommend a public health insurance plan. Last year, lawmakers tried to pass the plan but had to put it on hold due to COVID-19. Roberts said this year’s bill takes into account the effects of the pandemic by giving the industry time to recover from COVID and cut costs on its own.

At the heart of this new bill is the creation of 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 the standard plan that Bill would create, or if those insurers don’t meet monthly premium reduction targets, the state could step in and sell the Colorado Option Health Benefit Goes into 2025 in individual and small group markets.

The authority would initially only offer individual plans – and around 8% of Coloradans buy their insurance in the individual market. And since rural areas tend to have fewer people and less insurance options than urban areas, it’s possible that Colorado’s new Options Authority could operate in less populated counties which also tend to have a lower population. more expensive insurance.

“No one has to buy it,” Roberts said. “It’s just a choice. You do not need to leave your current insurance to purchase it.

The aim is to provide an affordable option for people who are uninsured or who buy their own insurance in the market, he said, and bring all players in the healthcare industry together to work out how to make costs more affordable.

The bill sets a target of reducing monthly premiums in each postal code by 10% in 2023, compared to what people in the same region paid for insurance in 2021. The savings target would increase further. by 10% in 2024. If insurance companies offered the new standardized plan, but did not meet these savings targets, the state authority could intervene.

However, the bill does not specify how insurance companies should meet these savings goals. It also leaves most of the decisions about what the plan would cover, and how much it would pay providers, to the Colorado Department of Health Care Policy and Financing, which also manages the state’s Medicaid program.

“It’s really not as bad as the opposition wants people to believe,” Roberts said. “We are trying to help a specific group of people facing unaffordable costs without disturbing everyone. “

Like last year, the bill asks the state to ask the federal government for a “waiver” and some of the money it expects to save with a public option. Essentially, the state will argue that the new regime will save the federal government money because it won’t pay as much in tax credits when people buy cheaper insurance in the market.

If the federal government says no, Roberts said the state should explore other funding options if, in the end, Colorado were to implement the insurance plan.

“But we hope the industries will do what they say they can and meet the goals of the bill to provide an affordable, quality health plan in every region of the state without additional state funding needs. or the federal government, ”he said.

Major changes are being made to the bill this year in the hope that it will pass, including getting rid of the explicit research of lower reimbursement rates paid to hospitals. Unsurprisingly last year, the Colorado Hospital Association opposed that part, arguing it would be expensive and possibly bankrupt smaller facilities.

Another difference is that last year’s bill required insurers to come up with a new plan. This year’s version allows them to opt out, which could dampen opposition from the insurance industry. However, they would still face competition from state authority if they chose not to sell the newly created plan.

Yet the bill will likely face significant opposition. Last year, national groups spent thousands of dollars on ads opposing the bill before details were introduced, and some of the same groups are still investing money in ads this year.

Industry leaders worked with sponsors on this year’s bill. But Katherine Mulready, chief strategy officer and senior vice president of the Colorado Hospital Association, said the group was still sorting out the details and it was too early to say which way the bill would end. by take.

“I think some elements of this bill are more promising than last year’s approach, most of which is the market-based approach, in the initial phase,” she said.

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