Fact Check-Up: The True Costs And Consequences Of The Colorado State Government Option

Apr 27, 2021

DENVER – Ahead of today’s House Health and Insurance Committee hearing regarding HB21-1232, which would create a new state government-controlled health insurance system, the bill’s supporters have continued to make misleading claims that obscure the true costs and consequences of this one-size-fits-all proposal, also known as the state government option. In an effort to correct these claims, a chorus of studies, analyses and experts make clear the state government option could increase costs for Coloradans, while threatening patients’ access to quality health care, services, and coverage choices.

RHETORIC: Coloradans Want A New State Government Health Insurance System.

REALITY: A Majority Of Colorado Voters DO NOT Support The State Government Option. 

  • “A Recent Poll Finds That A Majority Of Colorado Voters Do Not Support Creating The State Government Option And Do Not Trust The State Government To Design An Effective Health Insurance Plan As Much As The Free Market.” (Locust Street Group, 2/23/21)
  • “73 Percent Of Voters Prefer For Lawmakers To BUILD ON Colorado’s Health Care System Rather Than Create A New State Government Option.” (Locust Street Group, 2/23/21)
  • In 2016, Coloradans Overwhelmingly (79 percent) Voted “NO” On Amendment 69, Which Would Have Added A 10 Percent Income And Payroll Tax Hike To Fund A State-Run Universal Health Care System. “Amendment 69, Which Sought To Establish A Statewide System Called ColoradoCare To Provide And Fund Health Care For All Coloradans, Has Been Defeated By A Wide Margin.” (“ColoradoCare Suffered A Whopping Defeat. Here’s Why,” Colorado Independent, 11/8/16)

RHETORIC: The State Government Option Will Cover Increased Health Benefits And Better Care Than The Plans Currently Available. 

REALITY: The Proposed State Government Option “Standard Plan” Will Be Offered As A Qualified Health Plan (QHP) And Offers No New Benefits Beyond The Other QHP’s In The Market. 

  • The Essential Health Benefits A QHP Must Cover Are Defined By Federal Law And The Proposed State Government Option Only Covers The Minimum Benefits Defined As Essential Health Benefits In Colorado. (“Essential Health Benefits (EHB) Benchmark Plans,” Centers for Medicare and Medicaid Services)

RHETORIC: The State Is “Filling The Stopgap” Because Of An “Absence of Leadership” From The Federal Government.

REALITY: The American Rescue Plan Act (ARPA) Strengthens The Affordable Care Act, Broadens Eligibility And Increases Affordability.

  • ARPA Is “The Biggest Expansion Of Federal Help For Health Insurance Since The Obama-Era Affordable Care Act” More Than A Decade Ago. (“COVID Bill To Deliver Big Health Insurance Savings For Many,” The Associated Press, 3/9/21)
  • The American Rescue Plan Act Made New Funding Available To Increase Federal Subsidies Available to Coloradans To Broaden Eligibility By Removing The Current 400 Percent FPL Cap and Increase Affordability By Increasing The Premium Subsidy Amount For Individuals Enrolled In The Individual Market. (American Rescue Plan Analysis, Colorado’s Health Insurance Affordability Board, March 2021)
  • “The ARPA Includes The First Major Federal Expansion Of Marketplace Subsidies Since The ACA’s Enactment In 2010.” (“What if the American Rescue Plan’s Enhanced Marketplace Subsidies Were Made Permanent?” Urban Institute, 4/14/21) 
  • “States Must Account For A Number Of Policymaking Considerations In Light Of The PTC [Premium Tax Credit] Expansion And Uncertainty About Future Federal Action…Caution Against Making Lasting Changes Until Matters Are Clearer.” (“The American Rescue Plan’s Premium Tax Credit Expansion—State Policy Considerations,” Brookings Institution, 4/19/21)
  • “The Increase In The Premium Subsidies Offered Under The American Rescue Plan Will Go Even Further And Make Health Care More Affordable For Colorado Families.” (Janie Wade, Executive Vice President and Chief Financial Officer for SCL Health, House Health And Insurance Committee Hearing, 4/9/21)
  • “Pelosi’s Office Is Pushing The White House To Make Permanent A Temporary Expansion Of Affordable Care Act Subsidies… Pelosi Is Looking To Double Down On The ACA, Which Has Become More Popular In Recent Years As It Offers Insurance Subsidies To People Well Above The Poverty Line.” (“Biden Faces Pressure From Pelosi, Sanders Over Whether To Double Down On Obamacare Or Expand Medicare,” Washington Post, 4/12/21)

RHETORIC: There Is No Basis For The Claim That The State Government Option Would Make It More Difficult For Hospitals To Recruit Providers And Staff To Work In Colorado. 

REALITY: Colorado’s Health Care Community Is Already Facing Shortages Of Physicians And Nurses. The State Government Option Would Make It Harder To Attract And Recruit Health Care Workers, Particularly In Rural Areas. 

  • “Doctor Shortage Impacting Colorado Health Care.” (KOAA, 2/5/2020)
  • “Colorado Faced A Nurse Shortage Prior To The COVID-19 Pandemic. Now, The State Is In Desperate Need Of Health Care Workers.” (“Nurses In The Pipeline, Metropolitan State University of Denver, 5/20/2020)
  • “Is It Really The Private Practice Doctor That Is A Primary Cause Of Increasing Health Care Costs? I Don’t Think So. Will Lowering Providers Fee Schedules Really Improve Access To Health Care? I Also Don’t Think So. Regardless, With My Family Situation, Had This Bill [HB21-1232] Already Been Passed, It Would Have Prevented Us From Moving Here [Colorado]. And If It Passes In The Future, It Will Make Us Look Elsewhere For A Long-term Home.” (Dr. Earl Taylor Abel, Panorama Orthopedics & Spine Center, House Health And Insurance Committee Hearing, 4/9/21)
  • “I’d Like To Share Some Results Of A CMS Survey Of Both Member And Non-Member Physicians Across Colorado. 83 Percent Of Respondents Are Opposed To Mandatory Participation. And 73 Percent Are Opposed To Provider Rate Setting Respondents Expressed Grave Concerns About How The Impact Of This Legislation On Physician Burnout.” (Dr. Mark Johnson, Public Health Physician And President-Elect Colorado Medical Society, House Health And Insurance Committee Hearing, 4/9/21)
  • “Mandatory Participation In The Public Option With Threats Of Sanctions Against My License Would Make The Already Difficult Task Of Recruiting And Retaining Positions Even More Daunting. No Other State Requires Mandatory Participation In Commercial Insurance Plans, And The Same Is True For Medicare And Medicaid.” (Dr. Patrick Pevoto, Colorado Medical Society, House Health And Insurance Committee Hearing, 4/9/21)