Bill To Create State-Controlled Insurance Option Moves Forward With Changes

DENVER (CBS4) - A bill to create a state-controlled insurance plan received initial approval in the Senate Tuesday after more than six hours of debate and several amendments. The bill has already passed the House.

It promises to lower premiums and increase access to health care, but it would also impose mandates unlike any in the country. Those mandates have been a sticking-point with Democrats like Sen. Rhonda Fields.

"I just don't know how you can tell someone this is the max you can make," said Fields.

The bill would require every health care provider in the state to accept the so-called Colorado Option insurance plan. Not even Medicare and Medicaid have a mandate like that. It would also dictate what providers would get paid and what insurers could charge for the plan.

While it would only apply to the individual and small group markets on the state exchange, or about 15 percent of those insured in the state, opponents say it would indirectly impact all of us.

Sen. Kerry Donovan, the bill sponsor, got choked-up on the Senate floor while asking for the bill's passage.

"Thanks for giving me the grace to be emotional in front of you," said Donovan. "It's embarrassing, but it shows the importance of this."

For seven years, Donovan says, she has promised her mountain district that she would make health care more affordable and more accessible. The Colorado Option, she says, would finally make good that promise.

"We are working to make sure that we don't accept the status quo," she said.

The bill would create a state-controlled insurance plan that every carrier would have to offer at an 18 percent discount and every provider would have to accept for a percentage of what Medicare pays.

"The public is being promised something that is not going to be able to be delivered on," says Amanda Massey, with the Colorado Association of Health Plans, which represents 11 carriers that cover 3.5 million Coloradans.

Massey says some providers will get paid more under the bill than they do now making lower premiums impossible.

Sen. Jim Smallwood worries that those who get paid less will leave the state.

"Any problems that we fix on the cost side, we will have created new problems on the quality and access side," said Smallwood.

Donovan doesn't buy it.

"It would seem to be in the absurd to suggest that a bill to increase access to health care and improve things for our neighbors would ultimately result in pushing doctors out of the state," she said.

The bill was amended to remove fines against doctors if they don't accept the insurance. Dr. Sami Diab, President of the Colorado Medical Society, says that's a good start.

"I think we're moving toward assuring a good balance between cost and quality," said Diab.

The Medical Society and Colorado Hospital Association aren't opposing or supporting the bill. It still includes fines of $10,000 a day against hospitals that don't accept the insurance. They could even see their license suspended.

While doctors won't face fines, they are still mandated to accept the plan and could be sued if they don't. Opponents say if providers are forced to accept lower reimbursement, they will make up the money by charging more for those on employer-based plans or taking less Medicare and Medicaid patients.

"Ultimately, they're going to have to be able to cover their costs. And so cost-shift is inevitable," said Massey.

Donovan says the bill prohibits cost shifting and creates a new ombudsman whose job it is to make sure it doesn't happen.

If the bill gets final approval in the Senate, it will go to conference committee to reconcile differences with the House version. Then, both chambers will need to pass it again before it goes to the governor's desk.