By this fall, two state agencies are to present a way to offer a public insurance option for health care coverage under a bill that won final approval in the Colorado Senate on Wednesday.
That option, such as a way for people to buy into the state's Medicaid program, could be offered on or off the state's health benefit exchange known as Connect for Health Colorado, an insurance marketplace for individuals, families and small businesses.
Since that marketplace was created in 2011 as part of the federal Affordable Care Act, some counties have seen a dwindling number of private insurers offering plans because of the high cost of providing coverage. In some counties, many of which are on the Western Slope, there is only one option.
House Bill 1004, which was originally introduced by Reps. Marc Catlin, R-Montrose, and Dyan Roberts, D-Avon, is designed, in part, to see if a government-run option could compete with private companies by taking advantage of already negotiated Medicare prices with medical providers to spur private insurers to lower their premiums, thus lowering the costs to all consumers.
It calls on the Colorado Department of Health Care Policy and Financing and the Division of Insurance to study the matter and how it might impact private insurance.
The two agencies are to report back to the Legislature by November with specific recommendations, including how to seek a federal waiver similar to one the Legislature already plans to seek under House Bill 1168 — introduced by four local lawmakers, Sen. Kerry Donovan D-Vail and Sen. Bob Rankin, R-Carbondale, and Reps. Janice Rich, R-Grand Junction and Julie McCluskie, D-Dillon — that would create a reinsurance program to help lower costs for private insurance carriers operating on the exchange.
"This bill has the potential to more dramatically affect health care costs than anything else we've looked at," said Sen. Jeff Bridges, D-Greenwood Village. "Not only does this bill provide what we expect will be a lower-cost option for folks shopping on the exchange, but because it's a lower-cost option, it provides a competitive drive to other insurance companies on the exchange in offering health care to find ways to lower their own health prices in order to compete."
Republican senators, however, said that instead of forcing private insurers to lower their premiums, the bill more likely could force them out of the marketplace altogether.
Sen. Jim Smallwood, R-Parker, said the Legislature had looked at and approved other bills designed to help lower health care costs, such as increasing transparency in hospital charges and finding ways to lower prescription prices. He said the state should wait to see how effective those and other measures will be before taking state government into the private insurance business.
"I would really like to focus instead on ways of encouraging more insurance companies by fixing the other things that are broken around pricing," Smallwood said. "We've already made really good steps towards that goal. I would like to see all of the hard work that we've done, the progress that we've made over the past two or three years have a chance to work before we put the entire private marketplace in these counties at risk."
Donovan, a Democrat whose district includes Delta County and other areas with high health care costs, said the bill doesn't yet do anything but call for a proposal that lawmakers would consider during next year's legislative session.
If it turns out to be unworkable, lawmakers can decide that later, she said.
"This would be another insurance product that's available to try to address the issue of 14 counties that only have one insurer, so this would be another choice on the marketplace," Donovan said. "This is not the only solution that we will discuss this session on health care, but it is one of the more innovative ones. Innovative solutions can make people nervous, but innovation is part of the Colorado spirit. I hope you all have the same urgency I have of fixing this problem in any way we can."
Because of a minor change in the bill on the Senate floor earlier this week, the bill must go back to the Colorado House for a final vote before it can head to the governor's desk.
Gov. Jared Polis has written on his Facebook page recently that a public option would give Coloradans more choices, and could lead to helping them save money on health care, a major stated goal of his administration.