What They Are Saying: The State Government Option (House Bill 21-1232) Missed The Mark

Apr 16, 2021

DENVER – During last week’s first hearing before the Colorado House Health and Insurance Committee, health care professionals, small business owners, economic experts, union leaders and skilled workers voiced serious concerns and strong opposition regarding House Bill 21-1232, which would create a new state government-controlled health insurance system, known as the state government option. 

Lawmakers should listen to these Colorado leaders’ calls 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 new state government health insurance system.


Dave Davia, Executive Vice President and CEO, Rocky Mountain Mechanical Contractors Association:

1232 is misguided, from my perspective…Our actuarial analysis shows it will shift $1 million of costs, much like grabbing a balloon and pushing in the middle, those costs will appear in our plan. The Kaiser Family Foundation and others that have gone before me have cited Common Sense Institute saying that we have seen unprecedented decreases in health insurance costs. The closest state to us, Washington, who has done something somewhat similar to what is being fashioned here is shown a 15% increase in those costs even after a state option has been passed. The individual and small markets have two ways in order to compete. They have to compete on price, they have to compete on access. And both of those are not contemplated here. We believe that trying to combat high costs in insurance, 1232 is not the answer to that.

Gary Arnold, Business Manager, Denver Pipefitters Local 208:

We asked our plan actuary to review the legislation for possible impacts on our fund. After completing that review, they provided their memo and analysis to all trustees, including myself, and indicated that there would be a chance that our fund would be looking at a million dollars a year in cuts.

I just don’t see it being fair for blue collar, middle class, fitters and plumbers having to foot the bill for an extra million dollars each year. So I do appreciate the efforts, but unfortunately, I’m here to testify in opposition to 1232.

Dennis Doherty, Executive Director, AFL-CIO: 

On behalf of health care workers, we urge this committee to ensure this bill does not cause workers to be negatively impacted. When any company faces cost cutting requirements, they go after workers’ pay and benefits first. It is the fastest way to achieve cost reduction, but also the most harmful for working families and the economy as a whole.

Ron Ruggiero, President, SEIU Local 105: 

Our union is made up of over 8,000 service workers…and nearly 4,000 of those work in health care at Kaiser Permanente, the Mental Health Center of Denver and Planned Parenthood of the Rocky Mountains… Our state’s health care workers are exhausted from burnout and tired of being called heroes while not being treated as such. They’ve borne the brunt of this pandemic, protecting our communities, risking their lives and the lives of their families to provide the quality care that we all depend upon.

And I would ask everyone on this committee, on this issue, take the healthcare challenge over the weekend. Go talk to five healthcare workers and ask them. If their hospital or healthcare setting had to cut by 20% if workers would be impacted or not and I think you’ll get that answer. So while we work together to make sure that healthcare is affordable for all Coloradans, we must ensure protections for the healthcare workers we depend upon. We must not risk replacing one form in inequality with another and reject the false choice that we need to do that.


Dr. Marilu Orozsco-Peterson, Family Physician:  

As a Latina physician, I have a unique perspective in regards to this legislation that deserves to be heard…I had a lovely practice in Northern Colorado, Heritage Family Medicine, for 13 years and have 21 years’ experience in doing what I do. At one time, I employed 20 medical staff, include Physicians and Nurse Practitioners in Family Medicine and Geriatric Care in Nursing Home. I not only supported those Employees, but also their families, generating income security and pride in a small medical business practice, owned by a Minority Female… The perfect storm of decreasing reimbursements and increasing bureaucracy destroyed my beloved clinic and many other private practices in our area. 

HB21-1232 will nail the coffin on the preverbal head of medicine today, because no small practice could possibly navigate the red tape and restrictions you place upon it. Our dear State of Colorado could not sustain the obscene amount of money that it will need to create and sustain it. 

Dr. Reggie Washington, Chief Medical Officer, Presbyterian/St. Luke’s Medical Center and the Rocky Mountain Hospital for Children in Denver:  

I have some concerns about the potential impact this bill will have on the ability to deliver healthcare at Rocky mountain hospital for children, we have the largest level four NICU neonatal intensive care unit in the region. I’m concerned when we have to care for a 20 week premature baby, which can fit in the palm of my hand, these babies in our hospital for three to four months.

Dr. Armodios M. Hatzidikas, Orthopedic Surgeon: 

To me, the biggest concern is the ability to recruit high-quality, high-trained specialists here, to take care of you, all of us, your parents, your kids. It’s going to be harder—we’re already 43rdon the reimbursement rate and these kids will come out with all of this medical school debt. 

Dr. Warren Dorlac, Trauma and Emergency General Surgery Medical Director, Medical Center of the Rockies in Loveland, Colorado: 

The Public Option legislation has the potential to dramatically alter the availability of these critical access surgical services. Dramatically cutting reimbursement amounts will prevent needed investments and threaten our quality health care.

Due to state population growth alone, our system’s facilities are already stretched thin, have outgrown the infrastructure and will require a major capital investment to expand to meet our patients’ needs. If the hospital systems do not take on that huge burden, then who will?

Dr. Amit Agrawal: 

Without credentials, a provider cannot work at a hospital facility. While obtaining a Colorado state licenses, is the primary first requirement to be considered for credentials at a hospital. Revoking a physician’s license is a serious step.

It should be based solely on ensuring quality health care. That’s why we licensed physicians, and that’s why we credential physicians, is to make sure that we’re providing quality healthcare physicians who have had their license revoked will find it very difficult to work again, either in Colorado or in any state.

This bill proposes to threaten a provider’s license, not around the quality of the care that they provide, or on a final financial decision that we may be forced to make. I can’t tell you whether this new fee structure is survivable for independent practitioners or not. It certainly concerns me, but threatening my license is not an appropriate way to drive down costs… I do warn you that we should really keep licensing to drive in quality.


Annick Pruett, Grand River Health in Rifle, Colorado: 

When you live in a small rural community, eventually someone, you know, is going to be greatly affected by the work of the local hospital. In my work at Grand River Health, I’ve heard countless stories of how small hospitals have made large impacts in my neighbors and friends lives.

Cathy Shull, Executive Director, Pro15: 

Colorado has struggled. Rural Colorado has struggled. Northeastern Plains has struggled. Additional unknown policies and regulations put us back. Even if you get the cost of insurance down through this bill, you could certainly cause a closure of several rural hospitals. And while the cost of insurance might be lower, our access to healthcare has been greatly diminished. Do we think healthcare needs improvement? Yes, we do feel, however, that this bill has too many unknowns, gives too much authority to non-elected officials and will create unintended consequences.

Kelly Erb, Policy & Advocacy Manager, Colorado Rural Health Center:

We have significant concerns about the unintended consequences of this legislation and are worried that it might diminish access to the care it seeks to create. Either phase of the Colorado public option threatens access to rural health care.

We continue to hear it. This bill is intended to benefit rural hospitals. However, either phase of the bill has potential to do just the opposite.

Eastern Plains Healthcare Consortium: 

The origin of our consortium is to work together to reduce costs and improve quality, all in an effort to improve access to healthcare in our remote rural communities. However, the current “Public Option” proposal is not the solution. 

The cost of care in rural areas is significantly lower than in urban areas, yet inexplicably the health insurance premiums across the Eastern Plains are the highest in the state. This fact proves that the sponsors assumption that insurance premiums are an adequate proxy for the cost of health care is wrong. 

Since the passage of the Affordable Care Act in 2010, 28.5 percent of our Colorado rural hospitals are operating on a negative margin. The average operating margin for the EPHC hospitals is -5%. Experts generally consider a 4 percent operating margin to be sustainable. This bill threatens the sustainability of our local healthcare resources, and because our CAH’s are the primary employers and economic drivers of their home and neighboring communities, a loss of any one of them would not only negatively impact the physical health of our residents but will have a substantial impact on the overall sustainability of our communities.


Chris Brown, Director of Policy and Research, Common Sense Institute: 

House Bill 21-1232 would reduce revenue to the healthcare system between $830 million and $1 billion. This would force medical providers from physicians to hospitals, to acupuncturists, to be faced with a challenging decision. Cut costs in a way that could impact quality or access to care or find ways to increase costs, prices on other payers by increasing the cost, shifting that already occurs in the healthcare market. Our modeling shows that if those revenue reductions were born 100% by health care providers, it would reduce employment in that sector between 3,940 to 900 jobs.

Lauren Masias, Director, Colorado Competitive Council: 

The details of the bill did not provide for a realistic or reasonable opportunity for success. The timeline and process for applying for federal waivers and establishing the new authority suggest there was a foregone conclusion that the Colorado option will be operational as early as 2025. If the arbitrary targets aren’t met, the state would automatically, without further legislative action designed the Colorado option plan to compete with the plans offered by commercial insurers.

Debbie Brown, President, Colorado Business Roundtable: 

We’re only starting to understand the impacts of COVID-19 hospital. Finances are heavily strained across the state and they’re projected to lose 4.4 billion in the next 12 months. Putting our most vulnerable hospitals, particularly rural hospitals at risk of closure. We recognize that this is a complex system and we appreciate the lawmakers working on this important issue, but we’re concerned that price setting in the private industry, isn’t the role of government at this time, preserving what works and implementing common sense steps for the future are critical to our future success.


Angel Merlos, The LIBRE Initiative:  

I’m here to oppose HB1232, and any other attempt to impose the public option in Colorado. This type of legislation policy is wrong for Coloradans, particularly Hispanics. And numerous nonpartisan studies showing public option would raise premiums and reduce access to medical care and force hospitals to close and in rural areas many have discussed that already. And also, in underserved minority communities.

If we look at Washington the enacted public options last year, and where, you know, representatives were promising lower premiums, just like, you know, it’s occurring here, but the public option premiums in Washington did go up to 25% on traditional plans and, you know, working class Coloradans can’t afford that.

Coloradans want to fix what’s broken in our system. We all do, but we just don’t want to start over. HB21-1232 would take us in the wrong direction toward a government takeover with less choice and control, but more unnecessary harm to patients and providers.

Joni Inman, Executive Director, Colorado Women’s Alliance:  

We already know that government-run health care results in longer wait times for patients. We already know that in those states where public options have been implemented, like Washington State, premiums are not dropping but in fact are rising…We, at the Colorado Women’s Alliance, are opposed to HB21-1232 and we urge legislators to focus on sensible reform that we know is already working.

Clay Drake, Cancer Survivor in Windsor, Colorado: 

Government-mandated cuts in reimbursement could harm our state’s high-quality health care system – ending some services or limiting funding for clinical trials and research. A health insurance plan with artificially low premiums will damage free market competition. Soon, the public option will be the only option because other health insurance plans won’t be able to compete. There’s no level playing field here.

As we hopefully move toward the end of the pandemic, now is the time to rebuild our state’s health care system, not damage it. Now is the time to support nurses around the state, not threaten their jobs. Now is the time to thank physicians, not threaten their licenses or drive them out of our state.

Six years from now, Coloradans may look back on this moment as a time that either caused serious damage to our state’s quality health care system, or a time that elected leaders decided to stand up for doctors, nurses and hospitals and reject arbitrary and unattainable cuts to health care.