New Research Further Confirms that the Colorado Option is Failing to Deliver Affordability

Apr 19, 2023

DENVER — In case you missed it, new research from the Urban Institute analyzing state-by-state health insurance premiums confirmed that benchmark health insurance premiums increased an average of 3.4% nationally from 2022 to 2023, casting even further doubt on the feasibility of Colorado’s efforts to reduce premiums by 15% through the “Colorado Option” program.

The Urban Institute report demonstrates that Colorado’s public option has had no impact on Colorado’s benchmark premium rates, which were unchanged between 2022 and 2023, despite promises from lawmakers that the law would lower premiums. Further, the analysis shows that Colorado’s health insurance issuers delivered significant premium savings to Colorado consumers—an average annual decrease of over 10%—in the four years immediately prior to implementation of the Colorado Option.

The Urban Institute report is the latest in a series raising significant questions regarding the effectiveness of public option programs, stating “in markets that have relatively low premiums… a public option is likely to have little effect because most of the feasible savings are already captured.” Colorado has the fourth lowest benchmark premium nationally at $351 for 2023—more than $100 lower than the national average of $453.

The Urban Institute’s findings are in line with a recently issued report by NovaRest, which similarly found that Colorado’s state government-controlled health insurance system has fallen short of the promise to save Coloradans money on their health care.

The NovaRest actuarial analysis outlines how Colorado’s government-controlled system is increasing costs and reducing competition in the state’s health insurance market while driving health care provider shortages.

Read the Urban Institute report here.

Read the NovaRest actuarial report here.

Read more about Colorado’s Health Care Future here.