Fact Check-Up: Examining The Misleading Claims About The Colorado State Government Option

Apr 21, 2021

DENVER – During the House Health and Insurance Committee hearing to consider HB21-1232, which would create a new state government-controlled health insurance system, the bill’s supporters made misleading claims that obscured the true costs and consequences of this one-size-fits-all proposal, also 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 Reduce Premiums, 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 Percent 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 Percent 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 Percent, Compared to 15.5 Percent Increase In Washington State. Across The Nation, ACA Average Benchmark Premiums Have Fallen By 6.0 percent.” (“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, 3/10/21)
  • A Similar National Proposal For “The Public Option Might Have A Larger Effect On Sources Of Coverage For The Currently Insured Than The Currently Uninsured. If The Benchmark Premium Fell But Private Premiums Did Not, Subsidized Enrollees Who Remained In Their Current Plan Would Face A Reduction In Premium Subsidies And An Increase In Net Premiums.” (“A Public Option for Health Insurance in the Nongroup Marketplaces: Key Design Considerations and Implications,” Congressional Budget Office, April 2021)

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 Percent Of All Colorado Hospitals, Leading To $112 Million in Losses Annually… “Over 40 Percent 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)
  • “This Type Of Legislation Policy Is Wrong For Coloradans, Particularly Hispanics. And Numerous Nonpartisan Studies Showing Public Option Would Raise Premiums And Reduce Access To Medical Care And Force Hospitals To Close And In Rural Areas Many Have Discussed That Already. And Also, In Underserved Minority Communities.” (Angel Merlos, The LIBRE Initiative, House Health And Insurance Committee Hearing, 4/9/21)

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

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

  • “Nearly Three In Four Coloradans (73.8 Percent) 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 Percent.” (“Progress in Peril”, Colorado Health Access Survey, January 2020)
  • “The 28 Percent 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 Percent 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: The State Government Option Would Promote Health Care Market Competition.

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

  • Union Leaders Found A “‘Public Option’ Undermines Workers’ Group Plans” (The Gazette, 4/9/21)
  • “Our Actuarial Analysis Shows It Will Shift $1 Million Of Costs, Much Like Grabbing A Balloon And Pushing In The Middle, Those Costs Will Appear In Our Plan.” (Dave Davia, Executive Vice President and CEO Of The Rocky Mountain Mechanical Contractors Association, House Health And Insurance Committee Hearing, 4/9/21)
  • “We Know All Too Well That Cost Shifting Is Real And This Bill Does Nothing To Contain Costs. It Only Caps Payments.” (Diane Schwenke, President and CEO Of The Grand Junction Chamber of Commerce, House Health And Insurance Committee Hearing, 4/9/21)
  • “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)