Colorado House bill calls for public option if health care industry can’t reduce premiums 20% by 2024
Committee vote pending as legislators negotiate possible amendments
EAGLE — State Rep. Dylan Roberts said he’s “feeling good” about the prospects of the standardized benefit and public option health insurance bill that he helped sponsor after hearing more than 10 hours of testimony before the House Health and Insurance Committee on April 9.
The committee delayed its vote on the bill, giving Roberts and other sponsors time to negotiate possible amendments to consider before a committee vote, Roberts said.
“I was listening closely to everyone who testified, and I appreciate everyone who took the time to do that, if they support the bill or not,” Roberts said about the hearing, which lasted well into the evening.
The voices that resonated the most with Roberts are the same voices that prompted him to introduce House Bill 21-1232: people and small businesses struggling to afford high health insurance costs, in some cases as much or more than rent or mortgage payments, and high out-of-pocket costs as well as others who are going without insurance or health care because it’s too expensive.
“Even those who opposed the bill, almost everyone acknowledged health care costs are too high,” Roberts said about the hearing.
The bill would require Colorado’s insurance commissioner to create a standardized benefit plan, negotiated through a stakeholder engagement process, to be offered by health insurance carriers in the individual and small group markets and on the state’s health insurance exchange, Connect for Health Colorado. Carriers would be tasked to offer the standardized plan for 2023 at a rate that is at least 10% less than their premium rates in 2021 and at least another 10% less the following year, limiting rate increases to the consumer price index plus 1% for future years.
If the carriers do not meet those premium rate goals on average statewide, the state would be authorized to create a Colorado option authority: a nonprofit, quasi-governmental entity that would offer the standardized plan for purchase as a public option in those health insurance markets. As written, the bill would require health care providers and facilities to serve people with any benefit plan offered by the authority, though that’s expected to be the subject of a possible amendment.
The goal is to let the health care industry decide how to achieve needed price reductions, Roberts told the committee.
“We’re not telling them how to achieve that goal,” Roberts said. “If they’re going to be successful, it can’t come just from insurance carriers. The hope is it drives all people to the table to collectively negotiate and talk about how they can achieve savings to meet the goal.”
A concerning status quo
Roberts said when hundreds of thousands of Coloradans lost their jobs due to the pandemic, they lost their health insurance, too.
“Can you imagine going through COVID without health insurance? Because hundreds of thousands of Coloradans and their families did, and we need to create a way for an affordable health insurance product to be available that’s not connected to your employment status,“ Roberts said. ”That’s what this bill does.”
The committee heard from dozens of people who stepped forward to testify about the proposed bill, coming seemingly from every side of the controversial and complex issue of health care. Nearly everyone seemed to agree something needs to be done to reduce insurance costs, improve access to care, and make the system more equitable racially and geographically. But opinions varied widely on whether House Bill 21-1232 is the right bill to do that.
Some, like Adam Fox, deputy director of the Colorado Consumer Health Initiative, spoke in strong support of the bill. Fox said he hears daily from people struggling to afford their health insurance or out-of-pocket costs.
“This bill improves health equity by beginning to address some of the racial and geographic inequalities in health care by providing better value, better affordability and better access. It gives the health care industry a chance to bring more affordable, quality coverage to Coloradans, with a backup plan if they fail or refuse to do so,” Fox said, noting a 2019 report that found Colorado hospitals have some of the highest prices and profits in the country with “some spending only 54 cents of every dollar on patient care.”
Some small businesses owners said they could use all the help they can get affording health insurance for themselves and their employees, even as some business groups came out against the bill.
The health care industry itself stepped forward with a lengthy list of concerns about the bill, the level of savings targeted and where they would come from, and the impact on the health care industry, innovation and patient services.
Opponents and supporters
The measure is opposed by the Colorado Hospital Association, Colorado Medical Society and Colorado Association of Health Plans. The groups argued that the industry has already reduced premiums by nearly 30% over two years and that the bill threatens to stymie that progress and set up a public option that would not be a fair competitor.
Dr. Richard Zane, chief innovation officer for UCHealth, said the proposed bill would stifle the system’s ability to innovate, educate and do research. Dr. Margaret Reidy, its chief medical officer, said the bill would “cost jobs, lessen our ability to recruit excellent clinicians and ultimately erode the quality of care our patients deserve.”
Others involved with rural health care providers and systems that operate on tight, if not negative, margins, questioned where they would be able to find savings to meet the proposed premium reduction targets or how they would be able to treat another tier of customer if the public option’s reimbursements and cost schedules don’t cover costs.
Not all opposed the bill, however. Ross Brooks, CEO and patient at Mountain Family Health Centers — which offers medical, dental and behavioral health services in Garfield, Eagle and Pitkin counties — urged the committee to pass the proposed bill. Brooks said western Colorado has some of the highest health insurance costs in the nation, with a lack of competition, and said more than 7,500 of the 21,000 patients that Mountain Family serves still lack access to affordable health insurance.
Vail Health, which did not testify at the hearing, said it opposes the bill, though it recognizes the need to continue to work to make health care more cost effective.
“We believe it is an overreach by the government with many unintended consequences and that it does not acknowledge the progress that has been made since 2019, wherein premiums on the exchange have been reduced by approximately 30%,” it said in a statement.
Vail Health noted it has significantly lowered its MRI pricing, enhanced its direct contract relationships with self-funded employers, and enhanced access to behavioral health care through both a $160 million commitment and integrated services with Colorado Mountain Medical.
“Vail Health is dedicated to providing access to higher quality, more affordable health care, and we believe the two most effective ways to reduce more costly care is to focus on total health care for our community, with the intent of keeping people healthy and getting upstream and ahead of chronic health conditions, and working collaboratively to find meaningful solutions through market-driven, public-private partnerships, such as the Mountain Healthcare Coalition led by the Vail Valley Partnership,” it said.
Others speaking before the committee argued a 20% reduction should be manageable for the industry. They noted that Peak Health Alliance in Summit County was able to reduce insurance premium costs by 38% through a purchasing alliance.
Others argued that most of the premium reductions seen in Colorado have come from the reinsurance program that state legislators passed in 2019 and continued last year, noting that it is a temporary program.
About 10 counties still have only one company offering health insurance plans on the Colorado exchange. In Eagle County, the benchmark silver plan on the exchange is $424 per month for an individual and more than $1,600 per month for a family of four before any federal subsidies.
Michael Conway, Colorado’s insurance commissioner, spoke in support of the proposed bill. He said the state’s health care industry has long touted its ability to reduce costs without government intervention. “The problem is they have not delivered on that promise,” he told the committee.
“Reps. Roberts and (Iman) Jodeh are giving the health care market another opportunity to fulfill that promise, but if it fails to deliver, the representatives have also created a means to hold them accountable and increase affordability for Coloradans with a quasi-governmental entity that would be established if the market fails,” Conway said.
Some who testified, including unions and health care workers, also questioned the extent to which any health care cuts would fall on exhausted front-line health care workers, rather than well-paid executives or hospital profits, and requested additional protections to ensure that doesn’t happen.
Roberts said he and other legislators are negotiating possible amendments to put in safeguards for rural and independent hospitals and service providers, ways to make the premium reduction targets even more achievable on a statewide level and ways to make sure it’s not the jobs or hours of front-line health care workers that get cut. The goal, Roberts said, is to make sure more people have access to affordable insurance and can get care, and to make sure providers are paid for that care.
Roberts said he heard some hyperbole from a well-funded health care industry at the committee hearing, noting that he had already seen $2 million worth of opposition TV ads before the bill was even introduced. But Roberts said he also heard some valid concerns that he wants to see addressed before the bill is put to a vote.
“We want a bill that can get passed and work for a long time. We have the potential to do something big and want to make sure we get it right,” Roberts said about the legislation. “I’m confident we can arrive at a bill most people will support and have a real impact for people who need lower prices to buy insurance.”
This story is from VailDaily.com.
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