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Health Care Costs, Public Option, State Efforts

Colorado Has a Plan for Lowering Costs, Delivering High-Quality Affordable Coverage.

Published On May 17, 2019

States continue to lead the way in advancing innovative new approaches to affordable health care coverage and Colorado is the latest example. Today the Governor signed HB19-1004, a bipartisan bill to develop a competitive state insurance option. The bill seeks to address the problem of unaffordable coverage in regions of the state where insurer competition is limited or non-existent. There are fourteen counties in Colorado that only have a single health insurance carrier in the state exchange and premiums have grown 45%, on average, since 2014 in the individual and small group markets.

The legislation directs state agencies to develop a proposal that considers feasibility and cost for implementing a state option that leverages existing state health care infrastructure, increases competition, improves quality, and provides access to affordable health insurance. The bill leaves open what state infrastructure will be leveraged, what the eligibility criteria will be, what level provider rates will be set, and whether the proposal will be budget neutral. There are a variety of approaches that Colorado can consider, other states have chosen to build off their Medicaid program, state employee health plan and/or their exchange market. The proposal must consider a variety of plan designs and must develop a standard for what constitutes affordable coverage. The bill requires the proposal for a state option to be submitted to the legislature by November 15th of this year. As required by the legislation, state agencies will engage in a stakeholder process that includes public and private health insurance experts, consumers, advocates, employers, providers and carriers. It will be important for stakeholders to engage in this process over the summer to ensure the proposal delivered to the legislature reflects the best approach for everyone.

After the proposal has been created and submitted to the legislature, state agencies must submit any necessary waivers or state plan amendments to the federal government needed for implementation. The waiver or amendment process may be paused if state legislation is filed in 2020 that substantially alters federal authorization necessary to implement the state option proposal.

With the federal government unlikely to take significant action to lower health care costs in the near-term, Colorado is one of the latest examples of state lawmakers taking their own proactive approach to ensure access to affordable health care for their residents. Washington State also made recent progress in developing a state-based solution to providing more affordable coverage options. Before ending their session on May 3rd, Colorado legislators also passed a bill to establish a reinsurance program which could lower premiums in the state by more than 20 percent.

United States of Care commends Colorado for passing a bipartisan, state-based approach that targets affordability and access. Given the federal landscape, it is vital for states to pursue their own innovative solutions that work for their specific populations and needs. Colorado’s approach shows that it is possible for state leaders on both sides of the aisle to come together in support of approaches that will help more people afford the health care they need. Colorado has taken a big leap ahead and we look forward to tracking the progress this policy will make in providing affordable, quality coverage.