The Common Sense Institute business think tank issued its latest analysis around premiums and the proposed public option before the legislature, finding that proposed caps on premiums are well below the projected growth of of medical costs.

That translates to being unlikely that insurance carriers will be able to meet the 18% target over three years before the state steps in to issue fines or dictate medical reimbursement rates that the Colorado option plan pays to medical providers.

The bill passed the House on a 40-23 party-line vote on Monday and is pending before the Senate Health and Human Services Committee.

The report released Thursday afternoon indicates base medical provider reimbursement rates in the bill would be among the lowest if not below the lowest statewide average private insurance payment rates in the country.

House Bill 1232 was amended to shelve the government-created public option policy, which would offer below-market rates based on price caps, after health care providers said it would trigger budget cuts and job losses.

The Common Sense Institute examined the potential financial and economic impacts in a previous record called “Third Time is No Charm.”

"While there are important new details in the revised bill, its combined use of restrictive premium growth rate caps and low medical provider reimbursement rates will likely lead to a similar problem; government set prices that do not change the underlying cost of delivering care," states the report authored by Chris Brown, the Common Sense Institute's vice president of policy and research, and researh analyst Erik Gamm.

"As a result, it will force medical providers to cut spending in a way that negatively impacts access and quality, or it will force them to increase the cost shifting that already occurs in

health care thereby increasing prices for commercial payers."

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