The question of how to lower the cost of providing health care seems to be as persistent as it is vexing. The fact that all avenues being explored by the current crop of decision makers appear to point in one direction – the eventual adoption of a “single payer” or some other centralized system – ensures the question will persist to vex for quite some time to come.

A couple of years back, Colorado state legislators and the oracles at the State Division of Insurance cooked up what they reckoned was a brilliant plan to ostensibly arrest the price of health insurance in the individual and small-group markets. The law they passed created a (rather generous) state government-backed public health plan, christened the “Colorado Option”; required every insurance carrier in the state to include it in their offerings; and further required them to lower the premiums of those plans by 5% in the first year, 10% the second and 15% by 2025. The idea was that the government option would be the least expensive, doing two things: one, providing a low-cost plan that would be available to anyone in those markets that wanted it, and two, putting pressure on the carriers to lower the prices of their own offerings. It was a rather unprecedented injection of government into the health care market, but since it was draped in terms like “market-based” and “increasing competition,” that made it A-okay.

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Two years on, we have reached the much-anticipated inaugural year of implementation for the scheme, and the question is materializing here and there as to whether it has been worth the effort. It is a question worth exploring, especially in light of a recently released study by the actuarial consulting firm NovaRest. It informs us that in fact in nearly every county in the state, the Colorado Option plan is not the least expensive. This is so for 60 (out of 64) counties in the bronze-tier, 54 in the silver tier and 32 in the gold tier. Oops.

Moreover, the authors of the report tell us that the overwhelming majority of the benefit-packed Colorado Option plans – 85% – failed to meet their 5% premium reduction targets, despite the Division’s fiat that they simply do so.

Now that datum certainly makes things uncomfortable for the scheme’s backers – it is rather difficult to envision the plan’s reaching the even more chimerical 10% and 15% reductions in 2024 and 2025. And indeed, it turns out that for 2024 no carrier in the state (with the sole exception of Denver Health, which is a pretty minor player in that market) will be able to meet that 10% reduction target. Uncomfortable though the data are, the findings are not especially surprising.

The insurance carriers, in comments on their initial filings reporting on whether or not they anticipate meeting the state’s premium reduction targets, pretty much universally said that those targets are unrealistic and actuarially unsound. One cannot simply wave a magic wand or issue a decree to make costs go away. And a main reason why the costs of insurance are so high is the plethora of mandated coverages. For decades now, well before the Colorado Option was in place, the federal and several state governments, in an effort to maintain the impression of progressive concern for their constituents, have piled on mandated benefit after mandated benefit. In 1970, there were 30 mandated health insurance benefits in the United States. Today there are more than 1,400 at the state and federal level. All are attached to an arbitrary government ledger that arrogates to know what the acceptable price for an appendectomy is.

Providers are the next target. The public option law already calls for cutting reimbursement rates to doctors and hospitals – which has been done, and is still not enough to make the artificial utopic premium targets achievable. Already there is talk of imposing rate setting on hospitals, a form of price control. It is useful to note, again, that when we are talking “free” health care, we mean health care that is paid for by someone else.

The problem of medical costs may continue to vex, but we know what not to do; just as we know not to wrap a dirty bandage around a bleeding finger, we should not be wrapping rising health costs with the dirty bandage of wage and price controls. From there, it would be good if the DOI took a realistic, non-dogmatic look at what the consequences of the Colorado option have been and proceed accordingly.

Kelly Sloan is a political and public affairs consultant and a recovering journalist based in Denver.