It isn't really a public option that the state would offer people who purchase health care coverage. It's more like a public-private option.
That, at least, is to be the underlying proposal to a special legislative task force today looking at a possible public option insurance plan from the Colorado Department of Health Care Policy and Financing and the Colorado Division of Insurance.
The proposal is designed to work with other state programs already or soon to be in place aimed at lowering the cost of health care, such as the recently approved reinsurance program to help insurance companies cover the cost of high-claim patients.
"As we're working with hospitals and communities around the state with the affordability roadmap, rates will move," said Kim Bimestefer, executive director of the health care policy department. "As this program rolls out, rates will move. We're on a continuum of implementation of strategies that hear the voices of consumers and employers to lower health care costs and save people money."
Those two state agencies were charged by the Colorado Legislature to present a proposal to create a public option to private health care coverage as a way to force private insurers to lower premiums and out-of-pocket expenses for consumers.
But after several months of discussions and more than two dozen statewide public listening sessions, the agencies decided to present a plan that uses no taxpayer money or government services to operate or fund its own insurance plan.
That comes as good news to Rep. Marc Catlin, who was the only Republican to sponsor — and only a handful to actually vote for — House Bill 1004 during this year's session. That's the bill that created the task force.
The Montrose Republican said he took a risk putting his name on that bill, but agreed to because his constituents continue to clamor for relief on their premiums, which have skyrocketed in recent years, particularly in rural parts of the state.
Catlin said he feared the proposal was going to be some sort of Medicare for all program, but was pleased it isn't, adding that he has some concerns about the idea of capping hospital reimbursements, as the plan proposes.
"What it turns out to be, we're all still waiting to see because, well, government's involved. Oh boy," said Catlin, who was briefed on the proposal early Monday. "But I'm happy that it's not going to be some version of public care. The private companies are still going to be the ones who sell the product. I'm a little concerned about stepping into the marketplace and saying, 'You can't charge more than X,' but in reality, everybody's going to have to come to the table or nothing's going to happen."
Under the plan, all private insurance companies that operate on the individual market, which sells insurance coverage to individual buyers, would be required to offer this public option. They can do so at the same time they offer their regular plans.
Hospitals that serve patients who have those plans would see what they charge capped at no more than 225% of what Medicare pays. According to a Rand Corp. study of hospital charges released earlier this year, some are charging 300% to 600% of what Medicare pays.
That same study showed that some hospitals in the state have seen their revenues increase by as much as 76% over the past couple of years, while their administrative costs have been increasing by twice the national average.
That's why the proposal is aimed more at hospitals rather than insurance companies, said Bimestefer and Colorado Insurance Commissioner Mike Conway.
"The (Affordable Care Act) put cost controls in place for insurance companies, but what it didn't do was put any cost controls for the underlying cost of care, what we're paying hospitals," Conway said. "That's why we've seen, in part, our premiums skyrocket over the past four or five years. This is trying to target that exact issue."
While the proposal only calls for creating a public option for those who purchase coverage on the individual market, which only includes about 8% of Coloradans, it is designed to roll in the small business market, and perhaps the large business market, in coming years.
In the interim, however, it also would allow the insurance division to put the kibosh on any attempt to cost shift to employers as a way to make up for any loss in revenue on the individual market.
"We are not going to let that happen," Conway said.
Like Catlin, Diane Schwenke, executive director of the Grand Junction Area Chamber of Commerce who has been tracking the task force since it began its work in May, said she's somewhat encouraged about the proposal, but concerned about the details.
"I appreciate that they talk about rolling this out slowly, but they initially talked about it being a competitive product that's not in competition with the private market," Schwenke said. "It looks like they're just saying, 'If you, the private sector, want to be in the individual market you will carry this option.' If I'm on the other end of this, my sense would be to get out of the individual market, and that could cause more harm than good because your options are limited."
Assistant Insurance Commissioner Vincent Plymell said there is that concern, "but at this point, we don't believe that is going to happen, as the carriers are profitable."
Over the next two weeks, the task force will take public comments on the proposal, and plans to hold a listening session in Grand Junction later this month.
To see the proposal, and to make comments, go to www.colorado.gov/hcpf/proposal-affordable-health-coverage-option.