Reaction to the first draft of the Colorado Health Care Option bill, sponsored by Rep. Dylan Roberts, D-Eagle, and Sen. Kerry Donovan, D-Vail, runs the gamut.

The draft bill, first reported by Colorado Politics, sets a two-year timeline for the health industry to reduce premiums by 20% for the individual group market. Should that fail, the state would set up a quasi-public health plan to cover the individual and small group market, a total of about 15% of all insured people in Colorado. The state option, which would go into effect Jan. 1, 2025, would set rates for healthcare services in an attempt to reduce costs. 

The responses to Colorado Politics ranged from full-throated support to equally full-throated opposition, with a view that stayed between.

Support from health groups

“Reducing premiums would undoubtedly help the many patients Colorado physicians see who worry about paying for their care and medications, and even people who put off care,” said Dr. Kristen Nordenholz, an ER physician in Aurora and member of the Colorado Chapter of the Committee to Protect Medicare. “Literally every day I see patients in the ER who end up there with life-threatening conditions because they didn’t have access to preventive care and medications like insulin. If the Colorado Option is implemented, my patients and all Coloradans will have more affordable choices for their healthcare. That means more will be able to get the preventive healthcare, medications, and therapy that will help them stay healthy and thrive.”

The Colorado Consumer Health Initiative, which played a major role in the 2020 bill, called the 2021 version an opportunity for the healthcare industry to do what it says it can: lower the costs. CCHE Deputy Director Adam Fox said in a statement that “Even before the pandemic, 1 in 5 Coloradans — over 1 million people — were struggling to afford their health coverage and care. The situation has only gotten worse because of COVID as people have lost coverage and small businesses struggle even more to provide expensive coverage for their employees. The pandemic has highlighted the racial disparities that have long existed in our health care system and this legislation will help alleviate those inequities with better coverage at a more affordable cost.”

If the industry cannot reduce costs or refuses to do so, Fox said, “the Colorado Option will be established to lower costs and improve affordability. Either way, this proposal ensures more affordable and quality coverage options are available to all people living in Colorado.”

 “Affordable health care is not political,” said Healthier Colorado‘s deputy executive director Hillary Jorgensen. “This bill is an earnest attempt to give the healthcare industry the space and support to lower costs on their own. They repeatedly asked for this opportunity last year. We look forward to lifting the voices of people across this state who desperately need this bill to pass. Now is the time for bold movement and we applaud Rep. Roberts and Sen. Donovan for their work on this critical piece of legislation.”

Good Business Colorado, a left-leaning business group, also weighed in. Executive Director Debra Brown said that “small businesses in Colorado need relief, especially during this pandemic. Lowering the cost of healthcare is a top priority for Good Business Colorado and our members … we appreciate that the draft includes a small group option from the get-go and that it prioritizes public health equity. While the details are still in motion, it is well on its way, and that is good because our small business members don’t have time to let another session go by without health care reform that lowers costs and helps our business community build back.”

In the middle, but talking

Katherine Mulready, senior vice president and chief strategy officer for the Colorado Hospital Association, said Tuesday that the CHA had been in discussions with the bill sponsors since the beginning of the year, but Tuesday was the first time that they had seen draft language.

“Those conversations have been productive in trying to ascertain the goals. The bill takes a market-based approach, at least initially, allowing the healthcare industry two years to come up with a 20% premium rate cut. “I’ll take a market-based approach over a state-based approach any day,” Mulready said.

But at the same time, “we have a long way to go to see if the draft really sets the market up for success in phase one, or if it seems to be a predetermined outcome that we will migrate to phase two. Obviously that’s not our preference. “

Hospitals are committed to improving affordability and healthcare value, she added. “Does the draft strike it on the head and we don’t have changes? No. Is it something we’re willing to discuss, at this stage? Yes.”

The bill’s timeline for its first hearing — likely before month’s end — is also something of a concern. “It would have been better to engage the industry on the front end if they want this to work,” Mulready said. It doesn’t leave the industry a lot of time to find a workable solution. “We’ll do everything we can, but the clock is ticking.”

Opposed, adamantly

Colorado’s Health Care Future, an advocacy organization tied to the Partnership for America’s Health Care Future Action, which is funded by hospitals, pharmaceutical companies and health insurers that are opposed to Medicare for All or similar public-option-style plans.

In a statement Tuesday to Colorado Politics, spokesman Tyler Mounsey said that much of the healthcare community had been left out of the conversations around the Colorado Health Care Option, including analysis and actuarial estimates. The draft bill “only offers more of the same from last year’s failed public option bill. It is disappointing that lawmakers are willing to check-the-box instead of providing answers to important questions about the impacts of the bill and respond to concerns raised by vested stakeholders.”

The only difference between last year’s bill and the draft this week is that the sponsors propose a two-year timeframe for the health care community to meet the financially unattainable cost-cutting measures, Mounsey said. “No matter what the timeframe, the state government option would put politicians in control of Coloradans’ health care, could increase costs for Coloradans, and hurt patients’ access to quality care, services, and coverage choices.”

Colorado’s Health Care Future also released a study, conducted by FTI Consulting, that looked at the impact of the Colorado Health Care Option on racial and ethnic minority groups. The bill purports to deal with racial health care equity and to address long-standing racial disparities in health care.

The study was based on the 2020 version of the public option bill, which has similarities to the 2021 draft on Tuesday. Rate setting under the state government option, which the study assumed would be capped at 185% of Medicare, would lead to significant losses in hospital reimbursements over time, the study said. That reduction in revenue could put as many as 23 rural hospitals at increased risk of closure and result in millions in lost revenue for hospitals statewide.

And that could hurt both Black and Hispanic residents, the study warned. Nearly one-third of at-risk hospitals serve communities with Black populations; hospitals serving Hispanic communities all over the state would be especially hard hit.

The study listed 22 hospitals that would be at high financial risk; nine are in counties with at least 33% minority populations; seven of the nine are in the greater Denver metro area.

The study was paid for by the Partnership for America’s Health Care Future Action.