What’s the Truth about the Public Health Insurance Option Bill?

You may have read the articles, heard lawmakers speak or even seen the television commercials about a proposed public health insurance option in Colorado. There’s a lot of information flying around right now. But what’s the truth? The Chamber has done the research. Here’s what we know.

What is House Bill 1232?

Rep. Dylan Roberts (D-Avon), Rep. Iman Jodeh (D-Aurora) and Sen. Kerry Donovan (D-Vail) introduced House Bill 1232, “Standardized Health Benefit Plan Colorado Option.” It is scheduled to go to the Committee on Health & Insurance on Wednesday. The legislation requires that health insurance carriers reduce premiums for individual and small business market plans by 20% by the end of 2024. If the Commissioner of Insurance believes that carriers failed to meet that goal, a public health insurance option implemented by a government authority would be authorized in Colorado.

The Chamber has been working hard for the past few years to truly reduce health care costs for everybody. This bill doesn’t do that. At its core, this bill simply shifts costs. And, if implemented, it will shift those costs to people who get their health insurance through the private coverage offered by employers – the majority of Coloradans.

Here’s why the Chamber opposes the bill:

  • It will reduce competition, consumer choice and access to care.
  • It knowingly sets arbitrary and unreasonable timelines and requirements that ensure implementation of a publicly run health insurance program is a foregone conclusion.
  • It transfers the final decision to create a government-run health care plan to a single person, the Commissioner of Insurance, a member of the executive branch who doesn’t have direct accountability to the citizens of this state.
  • It mandates the creation of a new government bureaucracy without a sufficiently detailed plan for how to fund that new entity.
  • Most importantly, it does not address the underlying drivers of health care cost increases. Instead, it dictates arbitrary costs reductions for some Coloradans by shifting cost increases to other Coloradans.

But the bill’s supporters claim the opposite. How do we know what’s true?

We, along with the Colorado Competitive Council, did some digging into supporters’ numbers and here is what we discovered.

MYTH #1: The private industry has a chance to compete to lower premiums before a public option is implemented.

TRUTH: The legislation would immediately require the state to apply to the federal government for a waiver. The funding that would come from the waiver would be used to start building a new government authority right away, meaning that legislators are assuming the private market will fail at reducing costs. In addition, the bill sets arbitrary and unrealistic targets for premium reductions. Colorado’s reinsurance program has cut individual market health insurance premiums by nearly 21% so far. However, because the reinsurance program isn’t expected to expand and House Bill 1232 would require a 20% reduction in the nominal price from 2021, which does not account for inflation or medical cost trends, private insurers would need to drop premiums closer to 35% of what premiums would be in 2024 without reinsurance. Source: Common Sense Institute 

MYTH #2: Colorado’s individual market premiums are among the highest in the country.

TRUTH: Insurance premiums in the individual market in Colorado have come down 30% since 2019, compared to 6% nationally since 2018. Colorado’s five-year individual market premium reduction trend is second best in the country. These insurance premium reductions have occurred at the same time that Colorado has improved in overall health care quality and access, moving from 12th to 10th in the nation. Health care costs in Colorado are still too high and more work is needed, but we need practical solutions that address the true drivers of health care costs, not quick-fix solutions that shift costs from one segment of the market to another. Sources: Kaiser Family Foundation, Common Sense Institute and U.S. News & World Report

MYTH #3: Some Colorado counties, like Eagle and Routt, have only one option for residents who buy insurance on the individual market.

TRUTH: Anthem Blue Cross Blue Shield offers 20 plan offerings in its Bronze, Silver and Gold plans through the Connect for Health Colorado exchange. Cigna also operates in the market and offers plans for employers. Source: Connect for Health Colorado

MYTH #4: Coloradans want government health care.

TRUTH: Coloradans want affordable, accessible health care that works, and there is no evidence that public option plans work. Voters in our state also rejected government health care by overwhelming margins in 2016 when they shot down Amendment 69. Nearly 79% of Coloradans voted against the amendment.

What is the solution to health care costs and access in Colorado?

We share the goal of making health care more affordable for Coloradans and firmly believe that the best way to achieve that is through a robust, competitive marketplace. Through public-private partnership and industry innovation, Coloradans in the individual market have experienced meaningful reductions in insurance premiums, expanded product choice and increased competition in the private market in recent years.

We can keep up this work but not if a public option is forced on the market. Contact your legislators today to share your opinions.

Conversations around this bill are ongoing, and we’ll continue to keep you updated. If you have questions, you can always reach out to our Public Affairs team.