Colorado’s Health Care Future Statement on Individual Market Colorado Option Plans Public Comment Hearing

Jul 7, 2023

DENVER, July 7, 2023 — Colorado’s Health Care Future issued the following statement today on the Division of Insurance public comment hearing regarding individual market Colorado Option Plans:

“Nearly nine in ten Coloradans who shopped for individual coverage during the Colorado Option law’s first year rejected the Colorado Option and instead chose traditional health plans that provide better value for their personal needs. Traditional, non-Colorado Option plans remain the most affordable and best value plan offerings for most of Colorado. This may help explain why so few individuals testified on behalf of the Colorado Option during this week’s public comment hearings. 

“And this trend is unlikely to change. 85% of individual market Colorado Option plans could not meet the 5% premium reduction target for the 2023 plan year. Naturally, it’s unlikely that more aggressive price controls can be met in future years.

“In fact, the only issuer to meet the 2023 premium rate reduction requirement — Denver Health, a small carrier accounting for just one percent of Colorado’s individual insurance market — did so by pricing their Colorado Option plans at an unsustainable loss according to their own actuaries. This is the health plan that the law’s proponents are holding up as proof that the Colorado Option is working.

“The Division of Insurance and the State of Colorado should acknowledge what the Colorado Option experiment has confirmed: government rate-setting and price controls do not work. The only results so far have been a significantly consolidated health insurance market, with far fewer carrier choices than before, threatening access to care for patients, and significantly increased administrative costs for Colorado’s health insurers and hospitals. Now that the hearings are in the rearview, it’s time for DOI to stop requiring insurers and care providers to divert resources from patient care and instead support their efforts to deliver even greater affordability and value for Colorado patients and families.” 

Additional hearings background:

  • The Colorado Option law allows the Division of Insurance to set hospital reimbursement rates. In many cases, however, the rates in the law are higher than the rates that health plans negotiated with hospitals before the public option law.
  • There is no action that the Division of Insurance could have ordered through the hearings because insurers and providers had already achieved the statutory minimum reimbursement rates independent of the law.
  • A recent analysis by NovaRest, an independent actuarial consulting firm with extensive experience supporting state and federal insurance regulators, highlighted how the Colorado Option has fallen short on the promise to save Coloradans money on their health care. The actuarial analysis demonstrates how this state government-controlled health insurance system is increasing costs for Coloradans, reducing competition in the state’s health insurance market, and driving health care provider shortages that threaten access to care for patients. 

Read NovaRest’s actuarial analysis on the Colorado Public Option here.

Read more about Colorado’s Health Care Future here.