DENVER, Colo. – As Colorado lawmakers return to the Capitol today and resume the 2021 legislative session, a new report by the Common Sense Institute (CSI) details the five issues lawmakers should consider as they debate creating a new state government option. The report analyzes concerns with cuts to hospital funding during a global pandemic, increasing costs of insurance premiums, and the state’s hospital reimbursement rates.

In May 2020, CSI published a study on the legislation introduced last session, which modeled the impacts of a state government option, finding that “hospitals would face revenue reductions of $536 million to $1.1 billion per year over the first three years.” Additionally, rural hospitals could face more than double the revenue losses than hospitals in urban areas.

Their new report says “even before COVID-19 took a massive toll on the state’s health care system, there was significant concern about cutting hospital budgets or further increasing private insurance costs in order to pay for the public option. After a full year of pandemic-level conditions across the state’s health care system, those concerns have escalated.”

The report concludes, “Calling into question some of the most impactful components of the public option debate, does not mean that no problems exist. It should only reinforce the need to improve regulation surrounding health care markets, which can achieve shared goals of slowing consumer prices while mitigating the unintended consequences of newly intrusive legislation.”

Five Issues to Consider Ahead of Colorado Public Option Debate:

1. The last version of the public option bill, HB 20-1349, would have cut hospital funding without addressing the underlying cost of delivering health care services or significantly expanding health care coverage to the uninsured.
2. COVID-19 has triggered a budget crisis across Colorado’s hospital sector, especially rural hospitals, and further revenue cuts under a state-level public option would worsen an already dire financial situation.
3. Research used by state officials to support the proposed public option in Colorado has been updated and now contradicts original arguments, because it shows Colorado has lower hospital reimbursement rates than most other states.
4. The State of Washington’s public option, which was implemented last year, has failed to lower health insurance premiums for the majority of consumers.
5. Colorado now has some of the lowest average insurance premiums on the individual market in the country, thanks to a more stable regulatory climate and the early impacts of a new reinsurance program that has yet to fully play out.

To read the report by the Common Sense Institute, CLICK HERE.