New health insurance plan aimed at cutting costs is headed to Colorado governor’s desk

A Colorado bill aimed at lowering the cost of health insurance is through the Colorado legislature and on to the governor, who has indicated it’s a top priority for his office.

HB21-1232 was supposed to be a full public option — that is, the state offered an insurance plan — but that fell by the wayside during negotiations. What received final approval Monday night in the Colorado House went through several changes.

Under the bill, the state will require insurers to offer the Colorado Health Benefit Option by Jan. 1, 2023, in all 64 counties. It’ll be available for the individual and small group marketplaces, which cover about 15% of Coloradans, and by 2025, its premiums will have to be 15% less than the rates insurers offered in 2021 (adjusted for medical inflation). It will also set benchmarks for the types of care covered under the plan, including pediatric care and other essential benefits.

Bill sponsors hope the measure will get more uninsured people to buy insurance.

“At the end of the day, we have created a ‘Colorado Option,’ which means it is available to every Coloradan who wants to buy it, it’s going to be affordable and it’s going to be quality,” Avon Democratic Rep. Dylan Roberts said. “And no longer we subject just to what insurance companies want to offer and where they want to offer it — we are recognizing that every resident of Colorado deserves access to an affordable insurance plan.”

Health care lobbyists spent a record amount of money opposing the bill, saying the cost-cutting would hurt the industry financially — particularly smaller hospitals. And negotiations between lawmakers and health industry representatives like the Colorado Hospital Association and the Colorado Medical Society were fairly constant throughout the legislative session.

One thing sponsors gave up was a provision that would have fined health care providers for not accepting the plan, though the state’s commissioner of insurance could still force them to if there are not enough options for people on the plan in every county.

The Colorado Association of Health Plans, which represents insurers, still is against the measure, saying there is no research or evidence to back up the premium-reduction goals. Executive Director Amanda Massey said in a statement the group will be having discussions with lawmakers “when this policy flounders.”

“The math doesn’t add up – the government cannot add costly benefits to health insurance, increase reimbursement rates to hospitals, eliminate the participation of providers, and simultaneously ask for lower health insurance rates,” she said.

Republicans also argued the bill gets government too involved in health care. GOP Sen. Jim Smallwood of Parker called it a step toward free, government-provided health care.

“I think, at this point, it’s a garden-variety rate-setting bill on hospitals that is really a political move at this time much more than it is a move of substance,” he said.

But Colorado Alliance for Health Care Options backed the bill, and Center for Health Progress Policy Manager Ranya Hetlage in a statement called it “a win for Black and brown communities, rural Coloradans, small businesses, and so many others who deserve to be able to afford health coverage and care.”

Only Washington has passed a public-private health insurance plan, though it has not been available across that state in the way Colorado Democrats are hoping to see.

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