Statement On The Biden Administration’s Approval Of Colorado’s Section 1332 State Innovation Waiver Amendment Request To Create The ‘Colorado Option’

Jun 23, 2022

DENVER – Colorado’s Health Care Future issued the following statement today after the U.S. Department of Health and Human Services (HHS) announced the approval of Colorado’s Section 1332 State Innovation Waiver amendment request to create the Colorado Option.

“Experts have repeatedly warned that the Colorado Option could lead to higher costs and threaten Coloradans’ access to affordable, high-quality health care services – the exact opposite of what the politicians in Denver promised as they rammed it into law over serious objections from patients, doctors and other stakeholders. With work now ongoing to fast-track the implementation of this unaffordable new state government-controlled health insurance system, the responsible step would be to pause this process, closely consider the growing body of research and data that warns of the Colorado Option’s potential negative consequences, and instead focus on proven solutions that build on what’s working in health care to lower costs, protect patient choice, expand access, improve quality and support points of care that serve communities where the needs are greatest.”

recent analysis by the Common Sense Institute (CSI) warns that the Colorado Option program relies on deeply flawed assumptions that run afoul of actuarial soundness requirements that have long existed as the foundation of health plan premium development and oversight due to the program’s inability to account for the recent steep increases in medical costs that have resulted from the pandemic and the more recent impacts of inflation. As a result, the unsustainable and artificial Colorado Option premiums could drive unaffordable cost increases for the millions of Coloradans who receive their health coverage through their employer, and decreased access to the health access and high-quality health care Colorado patients rely on, as unsustainable Colorado Option plan premiums require pay cuts for Colorado’s hospitals and providers. “As we have demonstrated in our previous research, this will force difficult choices across the market, as providers choose to cut services or pass on costs to the remaining private insurance market, thereby increasing rates on everyone else,” said CSI’s Chris Brown.

separate analysis prepared for COHCF by independent actuarial firm NovaRest also warns of serious potential risks to Coloradans’ access to affordable, high-quality health coverage and care under the Colorado Option.The NovaRest analysis demonstrates that the creation of the Colorado Option carries significant risk for the health coverage market in Colorado, with potentially serious negative consequences regarding Coloradans’ access to coverage choices.