ICYMI: The State Government Option Could Further Racial Disparities in Health Care Affordability

Apr 1, 2021

DENVER – As Colorado lawmakers continue to deliberate and debate HB21-1232, which would create a new state government-controlled health insurance system in Colorado known as the state government option, lawmakers must consider the inequities and inequalities in health care affordability and work to address the gaps in access and care. Unfortunately, HB21-1232 missed the mark.

A recent national study found racial and ethnic minorities are more likely to struggle to afford quality care and the COVID-19 pandemic has intensified the long-standing inequalities in health care. These findings echo a recent report by FTI Consulting that the state government option could financially impact hospitals and disproportionately hurt access to care for racial and ethnic minorities in Colorado.

The report finds a Colorado state government option could financially impact 78 percent of all Colorado hospitals, totaling $112 million in losses annually, and threaten access to care for Coloradans, especially among members of racial and ethnic minority communities. Over 40 percent of hospitals that could be at higher risk for closure disproportionately serve Black, Latinx, and Native American residents, the report finds.

In a recent op-ed in Colorado Politics, Dr. Terri Richardson also cautions “a new, state government-run public option could ultimately hurt the very communities it is purportedly designed to help, leaving racial and ethnic minorities communities behind yet again.”

As lawmakers consider HB21-1232, including members of the House Health & Insurance Committee, it is encouraged to slow down, weigh the facts and work together to build on and improve what’s working in health care – not start over with an untested state government health insurance system.

Key Findings:

  • During this critical time, the state government option could financially impact 78 percent of all Colorado hospitals.
  • Today, racial and ethnic minorities in Colorado comprise one-third of the state’s total population, yet 40 percent of Colorado hospitals that could be at higher risk for closure under the state government option disproportionately serve these communities.
  • Hospitals fill a critical gap in care for Black and Hispanic/Latinx Coloradans, many of whom already contend with significant disparities in health status, access, and outcomes, and must rely more heavily on hospital services to meet basic health care needs.
  • Native Americans in rural areas could also see their access to care threatened. This builds on a previous report, which found 23 rural hospitals could be at increased risk of closure under the state government option.