Colorado’s Health Care Future Statement on Small Group Colorado Option Plans Public Comment Hearing

Jul 7, 2023

DENVER, July 6, 2023 — Colorado’s Health Care Future issued the following statement today on the Division of Insurance public comment hearing on small group market Colorado Option Plans:

“When it comes to the Colorado Option’s failure in the small group health insurance market, the proof is in the pudding. Virtually zero small businesses selected Colorado Option plans in 2023. And there’s no reason to suspect 2024 will be any different, as nothing in the law will change from this year to next to prevent the continued failure of the Colorado Option to deliver the lower costs that were promised to Colorado consumers.

“It’s clear that the Colorado Division of Insurance cancelled the planned hearings with health insurers to avoid repeated public confirmation of these facts. Not to mention that health insurers and care providers had already achieved the statutory minimum reimbursement rates independent of the law rendering many of the hearings useless.

“The continued claims from the law’s proponents that the program is working as intended are misleading Colorado consumers. It’s time for some Colorado politicians to acknowledge that the Colorado Option is not delivering the value that was promised, and that health insurers and care providers were already delivering as much affordability and value as possible, despite the Colorado Option law, not because of it.

“The Division of Insurance needs to stop doubling down on this policy. Continuing to mandate Colorado health insurers and hospitals to undertake the significant administrative costs that are required to offer Colorado Option plans that no Colorado businesses are buying is leading to avoidable costs that only increase the cost of care across the state.”

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.