Higher Prices and Fewer Health Carriers Punctuate Year One of Colorado’s Struggling Public Option Experiment

Oct 25, 2022

DENVER – Colorado’s Health Care Future issued the following statement today after the Colorado Division of Insurance (DOI) released final rates for 2023 fully insured health plans, including the Colorado Option plans. HB21-1232, which created the Colorado Option last year, mandated that health insurers reduce monthly premiums by five percent in the first year for consumers who buy the plan.  

“As the state rushes to implement the Colorado Option, it is clear they are attempting to put a positive spin on the failure of this new government-controlled health insurance system. During the program’s first year, four prominent health insurance carriers have notified the DOI they will either completely exit the Colorado market, or exit the state’s important small group market, further decreasing choices for employers and disrupting Coloradans’ access to the doctors and providers they depend on for their care. Additionally, PEAK Health Alliance will also fail to offer health plans in 2023, resulting in yet fewer health plan options and further disruption for Coloradans across Western Colorado. 

“When you peel back the layers, initial review of 2023 premium data suggests that this newly created one-size-fits-all system (of government mandates and regulations) is failing to deliver the savings politicians promised as they rushed to push the new program through the state legislature.

“It’s time for Colorado to build on what is working in health care rather than doubling down on a failing experiment that is disrupting Colorado’s health system increasing prices for consumers, and resulting in fewer health insurance carriers and less competition.”

Initial review of the recently released DOI rate data suggests

  • In 2023, traditional (non-public option) commercial health plans will offer Coloradans their most affordable coverage options across most of Colorado on both the small group and individual markets. In many cases, traditional commercial health plans will offer significantly more affordable premiums that are 5% to 10% lower than competing Colorado Option plans, particularly for some Bronze and Silver tier plans that are most popular with consumers. 
  • In the clear minority of Colorado counties where a Colorado Option plan is the most affordable option, the Colorado Option mostly achieved low-single-digits to less than 1% price decreases compared to competing commercial (non-public option) health plans. 
  • While Coloradans in the state’s most populated Denver Metro-Front Range regions will have access to at least one compliant Colorado Option plan, most counties and entire regions across Colorado – including the West Slope’s individual market Region 9 – will not have access to even one compliant Colorado Option plan. 
  • If allowed to proceed, this program will require even deeper pay cuts from Colorado hospitals and doctors, placing patients’ access to high quality, necessary care at risk, and posing the greatest risks to those already in the most underserved communities and regions of the state.  

Recent analyses have warned that the Colorado Option is unaffordable and unsustainable. The Common Sense Institute (CSI) found that the Colorado Option’s artificial premiums would likely increase costs, decrease access to quality care and lead to cuts for the health care providers Colorado patients depend on – the exact opposite of what politicians claimed the Colorado Option would do. Independent actuarial firm NovaRest already cautioned in a study earlier this year that carriers’ ability to meet the premium reduction requirements is tied to their ability to offer non-standard plans in the market and could force some carriers to exit certain counties, limiting Coloradoans’ access to coverage choices.

Today, the free market and existing public programs are working together to expand access to coverage and care, and more Coloradans than ever before are using the marketplace to receive health care coverage. Nearly 200,000 Coloradans enrolled in a marketplace plan during the state’s open enrollment period earlier this year. The Affordable Care Act (ACA) subsidies provided by the American Rescue Plan Act (ARPA) have lowered premiums by an average of $900 per year for 155,000 enrollees and have increased enrollments in rural communities. This is a clear demonstration of how our current system is working. 

The fact remains that there is no successful public option in the country, and the data released today shows that the Colorado Option could soon be another example of failed public policy at the expense of Colorado patients. Colorado should instead build on and improve what’s working in our current health care system to ensure that every Coloradan has access to the high-quality, affordable health care they deserve.

Read more on Colorado’s Health Care Future HERE.