Evaluating the Risk to Colorado’s Health System Posed by a State Government Option
Colorado’s efforts to expand access to health insurance have resulted in historic gains in coverage over the past decade, while more recently implemented policies are expected to dramatically improve health care affordability by reducing premiums for private coverage in the state’s exchange.
With these measured approaches to reform, the state of Colorado has the potential to serve as a model for states across the nation.
The introduction of a state government option, however, threatens to undermine this progress and introduce disruption in Colorado’s health care system, diminishing consumer choice in the commercial marketplace, raising premiums for individuals with private insurance, and pushing insurers out of the market entirely – all for limited gains in the insured population.
Previous analysis has shown that the state government option would create fiscal challenges for hospitals across the state, particularly in rural areas, and that it would do little to increase the insured rate.
To measure the likelihood of disruption from the state government option, FTI Consulting conducted a statewide plan to assess its impact on insurance coverage, premiums, and the continued availability of private insurance plans.
In 2019, Colorado state legislators, with backing from the administration of Governor Jared Polis (D-CO), passed HB19-1004, which instructed the Colorado Department of Health Care Policy and Financing (HCPF) and the Division of Insurance (DOI) to develop a proposal for a government option for health coverage.1
In March 2020, HB20-1349, a bill modeled off these recommendations, was introduced in the Colorado General Assembly.
1: HB19-1004 “Proposal For Affordable Health Coverage Option.” https://leg.colorado.gov/bills/hb19-1004. Colorado General Assembly.