Correcting Common Myths About the Colorado State Government Option

Mar 25, 2021

DENVER – Following the introduction of HB21-1232 to create a new state government-controlled health insurance system, Coloradans have been subjected to misleading claims about the costs and consequences of this one-size-fits-all proposal, known as the state government option. Studies and experts agree that the state government option could increase costs for Coloradans, while threatening patients’ access to quality health care, services, and coverage choices.

RHETORIC: A New State Government Option Would Provide Long-Term Affordable And Quality Health Care For Coloradans.

REALITY: The State Government Option Could Mean Higher Costs.

  • “Public Option Plans…Cost As Much As 29% More Than Traditional [Private] Health Plans” On Washington State’s Individual Health Insurance Market, “According To Data From The Washington Health Benefit Exchange.” (“First Government-Run Health Plan Portends Rocky Start for Biden,” Bloomberg Law, 11/18/20)

  • “Average Proposed Public Option Premium[s] [Are] 5% Higher Than 2020 Average Obamacare Premiums.” (“Public Option Experiment Hits Speed Bump as Premiums Don’t Fall,” Bloomberg Law, 8/10/20)

  • “Since 2018, Colorado Benchmark Premiums Have Fallen By 25.3%, Compared to 15.5% Increase In Washington State.Across The Nation, ACA Average Benchmark Premiums Have Fallen By 6.0%.” (“Recent Trends in Health Insurance Costs: Early Results of Public Option in Washington State Compared to Colorado,” Common Sense Institute, 3/9/2021)

  • “Without A Public Option, Colorado Still Has Outperformed Washington.” (“Colorado Premiums Beat Washington Without a Public Option,” Colorado Politics, 3/17/21)

RHETORIC: The State Government Option Would Create Equity In The Health Care Buying Process.

REALITY: The State Government Option Could Disproportionately Limit Access To High-Quality Care – Hurting Underserved Communities Who Need It Most.

  • A State Government Option Could Financially Impact 78% Of All Colorado Hospitals, Leading To $112 Million in Losses Annually… “Over 40% of Hospitals At Higher Risk For Closure As A Result Of Reimbursement Cuts Under The State Government Option Serve Racial And Ethnic Minority Communities, Many Of Which Already Contend With Significant Disparities In Health Status, Access, And Outcomes. (“Colorado Government Option: Impact on Racial and Ethnic Minority Groups,” FTI Consulting Report, February 2021)

RHETORIC: Without a New State Government Option, Coloradans Won’t Have Affordable, Accessible Health Care.

REALITY: Coloradans HAVE Affordable Accessible Health Care And Lawmakers Should Build On And Improve Colorado’s Health Care System.

  • “About 93.5% Of Coloradans Have Health Coverage.” (“Progress in Peril”, Colorado Health Access Survey, January 2020 
  • “Nearly Three In Four Coloradans (73.8%) Are Happy With The State’s Health Care System, Saying It Meets The Needs Of Their Families. This Has Remained Relatively Consistent Since The Implementation Of Major ACA Reforms In 2014, And It Represents An Increase From A Pre-ACA Approval Rating Of 69.1%.” (“Progress in Peril”, Colorado Health Access Survey, January 2020 
  • “The 28% Decline Since 2019 Means Colorado Now Has The 6th Least Expensive Average Benchmark Premiums In The Country. At $351 Per Month, Colorado’s Benchmark Premium In 2021 Is Also 22% Lower Than The National Average Of $452 Per Month.” (“Five Things Lawmakers Should Consider Before the Next Round of the Public Option Debate,” Common Sense Institute, February 2021) 
  • The Historic Drop In Colorado’s Uninsured Rate May Stand As One Of The Biggest Success Stories From The Affordable Care Act (ACA). This Is Due In Large Part To Colorado’s Decision To Expand Medicaid In 2013.” (“ACA at 10 Years: Medicaid Expansion in Colorado,” Colorado Health Institute, 1/27/20)

RHETORIC: Many Coloradans Today Have Limited Health Coverage Options.

REALITY: 83% Of Colorado Counties Have Two Or More Health Coverage Options On The Individual Health Insurance Marketplace.

  • “Consumers Will See More Choice…As The Number Of Counties With Only One Carrier Offering Plans On The Individual Insurance Market Is Dropping To 10, Down From 22.”(“Colorado Individual Health Insurance Rates Drop For Second Year In A Row,” Denver Business Journal, 10/9/20) 
  • “For 2021, The Reinsurance Program Will Save Consumers Across Colorado An Average Of 20.8% Over What Premiums Would Have Been Without The Program. On The Western Slope And Southwest Colorado, The Program Will Save Coloradans Nearly 38%.” (“2021 Individual Health Premiums Decreasing By 1.4% Over 2020 Premiums,” Colorado Division of Insurance, 10/8/20)

RHETORIC: The State Government Option Would Create More Stability For Rural Hospitals and Providers.

REALITY: The State Government Option Would Threaten Access to Care in Rural Communities.

  • Rural Hospitals Would Be Disproportionately Negatively Impacted, And Face Reduction In Revenue Double What Urban Hospitals Would Face On A Percentage Basis.” (“The Colorado Option Plan: Modeling the Impacts of Government Price Controls in Health Care,” Common Sense Institute, May 2020) 
  • 25% Of Rural Hospitals Nationwide Are At A High Risk Of Closing Unless Their Financial Situations Improve. Of These Hospitals, 82% Are Considered Highly Essential To Their Communities.” (“2020 Rural Hospital Sustainability Index,” Guidehouse, 4/8/20) 
  • Rural Hospital Closures Now Stand At 135, And Our Research Indicates That Another 453 Are Vulnerable To Closure. The Rapid Spread Of COVID-19 In Rural Communities Has Further Destabilized The Ability Of Rural Hospitals To Meet The Needs Of Their Communities.” (“The COVID-19 Pandemic and the Stability of the Rural Health Safety Net,” The Chartis Center for Rural Health, 2/5/21) 
  • “23 Rural Hospitals Could Be At Increased Risk Of Closure Under The State Government Option.” (“Colorado’s Government Option: Assessing the Impact of Reforms on Access to Health Care,” FTI Consulting, 1/6/20)

RHETORIC: The State Government Option Would Promote Health Care Market Competition.

REALITY: The State Government Option Threatens The Employer-Provided Health Coverage Millions Of Coloradans Rely On.

  • “Hospitals Would Be Faced With A Choice: Cut Services And Access To Care And/Or Pass The Costs Of The Colorado Option To The Private Plans That Remain In The Individual And Employer-Provided Insurance Markets.” (“The Colorado Option Plan: Modeling the Impacts of Government Price Controls in Health Care,” Common Sense Institute, May 2020) 
  • Market Exits By Insurers Are Likely To Accelerate Following Implementation Of A State Government Option And Plan Options May Diminish Rather Than Increase Under The Plan. Consumers Will Likely Find Few, If Any, Distinctions Between The Plans Available To Them Due To The Stringent Benefit Design For The Government Option.” (“Introducing Disruption: Evaluating the Risk to Colorado’s Health System Posed by a State Government Option,” FTI Consulting, 3/20/20)