DENVER (CBS4) – After years of talking about a public health insurance option, state lawmakers have introduced a bill to create the Colorado Affordable Health Care Option. It is a public-private insurance plan.
Under the bill, the state would force insurance companies to sell the plan in every county and every hospital would accept it or risk losing their license. The state would also set reimbursement rates based largely on a percentage of what Medicare pays.
“The Colorado Health Care Option will hold corporate health care profits accountable,” said Representative Dylan Roberts, lead sponsor of the bill.
Initially, the plan would be open to about 8% of Coloradans who buy their own insurance. Eventually, it would be expanded to the small group market. Co-sponsor Representative Chris Kennedy said the goal is to force down premiums for everyone.
“Now is not the time for tinkering around the edges and working on small policies to make small differences,” said Rep. Kennedy.
Heidi Baskfield with Children’s Hospital said government price controls could force hospitals to shift costs to employer based insurance, driving up premiums for everyone.
“Only coming after hospitals for what is a much larger health care issue is tinkering around the edges,” said Baskfield.
Amanda Massey with the Colorado Alliance of Health Insurers warned too of unintended consequences. She says insurers will lose money administering the plan for the state and some might leave Colorado.
“I think insurers will have to make very difficult decisions,” said Massey.
Roberts isn’t convinced. The state option, he said, only impacts about 300,000 Coloradans who buy their own insurance now. He said those who switch to the state option will see a 9-20% reduction in premiums.
“We cannot tell the people of Colorado that the status quo is okay. The Colorado Option is the first guarantee that they will have an affordable choice on the individual market,” said Roberts.
No one has to switch to the state plan but if they don’t, they could end up paying even more than they do now. Most of those who buy their own insurance get federal tax subsidies and those would drop. The bill sponsors are seeking a federal waiver to address that, as well as working on Republican support for the bill.