ICYMI: “The Colorado Option Is Failing”

Nov 23, 2022

“Government-controlled experiment is clearly not living up to its promises of significant savings”

DENVER – In case you missed it, State Senator and Health and Human Services Committee member Jim Smallwood penned an op-ed published in The Colorado Springs Gazette outlining how Colorado’s new state government-controlled health insurance system, known as the Colorado Option, is failing to deliver on promises of increased savings while actively decreasing competition in the state’s insurance market. 

The Colorado Option mandates that health insurers lower their rates by five percent in the first year, 10 percent in the second year and 15 percent in year three. Smallwood writes:

“[T]hese state-designed mandated rate decreases created unreachable goals. The Colorado Division of Insurance (DOI) last month released its rates for 2023, and lo and behold, health insurance rates have not gone down — they’ve actually gone up…‘Colorado’s insurance premiums in fact will rise by over 10 percent next year in the small group health insurance market. Premiums will go up more than seven percent for individual health plans.’”

“The reality is that for most Coloradans, the Colorado Option plans are more expensive than the traditional, non-Colorado Option plans. In fact, 60 percent of Coloradans will have plan choices that are less expensive than the Colorado Option. What’s more, even in the few areas where the Colorado Option plan is the lowest cost plan, the savings are minimal — a mere 10 to 48 cents per month at best. This is hardly the discount that backers of the Colorado Option claimed the system would deliver.”

“But perhaps the most alarming part is that four prominent health insurance companies have announced in recent weeks that they are partially or completely exiting the Colorado market this year. Then in another blow, Peak Health Alliance, which serves Summit, Grand and La Plata, also announced that they will not be offering coverage in 2023 because of these departures.”

“These exits are significant because there are simply not that many health insurance companies in the state to begin with…With the exit of these carriers, there are fewer choices for care. Thousands of Colorado patients will now have to find a new carrier and possibly new doctors.”

It’s clear, as Smallwood points out, that rate increases under the Colorado Option “are unreasonable and frankly impossible for health insurance carriers to meet… Carriers are fleeing the state because it’s too expensive to do business here, and the only people who suffer are Colorado patients.” 

Instead of pushing ahead with this unaffordable, state government-controlled system that is already failing Coloradans, policymakers should prioritize building on and improving what is already working to increase access to affordable, high-quality health care across the state. 

  • Read the full op-ed HERE.
  • Read more on Colorado’s Health Care Future HERE.