ICYMI: First State Public Option ‘Struggles To Gain Traction’

Feb 28, 2022

DENVER – As politicians in Colorado push forward with the creation of an unaffordable, new state government-controlled health insurance system, known as the “Colorado option” or “public option,” a similar system is failing in the one state in which it has been implemented.
NPR and Kaiser Health News report on the struggles of the state government-controlled “public option” system in Washington state.

  • UNAFFORDABLE COSTS: The proponents of the public option in Washington state estimated public option plans would have “premiums 5 percent to 10 percent lower than traditional plans on the exchange. But public option premiums were, on average, 11 percent higher than the lowest silver plan premium available in each county on the marketplace in 2021, and a silver public option plan had the lowest premium in just nine counties.”
  • LOW ENROLLMENT: Only 1 percent of people buying plans on the exchange chose public option plans in 2021.”
  • PUTTING ACCESS TO CARE AT RISK: Health care leaders have warned that “the public option relies on cutting payments to hospitals to control costs and ties reimbursement to Medicare rates, which don’t cover hospitals’ cost of providing care.”This could put patients’ access to quality care at risk.

While the state government option fails in Washington state, private plans and existing public programs are working together to provide Coloradans with access to affordable, high-quality health coverage and care.
For example, 198,412 people enrolled in health coverage through Connect for Health Colorado during the open enrollment period which ended on January 15, Colorado Newsline reports. This is more than a 10 percent increase in enrollments over the same period last year, and of those who signed up for plans during open enrollment, three-quarters received savings, with an average savings of 52 percent. 

At the same time, a new analysis by NovaRest, an independent actuarial consulting firm with extensive experience supporting state and federal insurance regulators, warns that implementing the “Colorado Option” poses serious potential risks to Coloradans’ access to affordable, high-quality health coverage and care.

Instead of creating a new state government-controlled health insurance system that could threaten Coloradans’ access to affordable, high-quality health coverage and care, policymakers should focus on proven solutions that strengthen what is working today, including supporting greater participation in existing health coverage resources that help Coloradans get healthy and stay healthy.