Slew of health care bills seek fixes to public option, prescription drug board

Gov. Jared Polis and lawmakers are expected Thursday to roll out a package of bills designed to correct issues with the 2021 bills on the public option and prescription drug affordability, as well as require nonprofit hospitals to prove they're providing community benefits to address the needs of people of color and the unhoused.

The public option bill, passed by Democrats in 2021 and which went into effect for the first time on Jan. 1, required the Commissioner of Insurance to create a health insurance plan that private health insurance carriers would be required to provide.

The law dictated that health insurance carriers lower their premiums by 5% per year for three years, outside of medical inflation. 

A fact sheet from the Division of Insurance said the proposed bill would "strengthen the division’s ability to hold carriers accountable for the premium rate reduction requirements on Standardized Plans by allowing the Division to limit such factors as excessive profit and administrative expenses."

The fact sheet also claimed the division was able to save consumers $17 million through its rate review process, and passage of the public option true-up would continue to save consumers money. 

The second bill deals with the prescription drug affordability board, which was adopted through Senate Bill 21-175. The five-member board was granted authority through the law review prescription drug costs and recommend ways to address those costs, including caps on the costs of certain drugs. Under the legislation, the board could not impose caps on more than a dozen drugs every year.

The board, however, has yet to report its activities to the governor or the legislature. Its first report isn't due until July 1. 

A fact sheet from the Division of Insurance said the new legislation would extend the board's authority from five years to ten years, under the state's sunset review process, and remove the limit on the number of drugs the board could cap prices on every year.

The community benefit concept, another bill expected to be introduced today, was adopted in California in 2021. Under that legislation, and according to the National Academy for State Health Policy, private non-profit hospitals must adopt a community benefit plan that “describes the activities the hospital has undertaken to address identified community needs within its mission and financial capacity, including health care services rendered to vulnerable populations," to include racial and ethnic groups with "disparate health outcomes," the unhoused, communities that lack adequate access to clear air and safe drinking water, people with disabilities, LGBTQ+ individuals and those for whom English is not a first language.

The Colorado Hospital Association pointed out that their member hospitals invest substantially in their communities: In 2020, Colorado hospitals invested more than $1.6 billion into the health and wellbeing of Colorado communities.

That included services to improve community health, "including addressing social determinants of health and health behaviors and risks" and free and discounted care.

Non-profit hospitals "comply with federal IRS requirements for how to provide and account for community benefit," the CHA noted.

Other bills expected to be on the list for the Thursday news conference include another measure on hospital transparency and one on "spread pricing," which applies to pharmacy benefit managers. Under a definition from the National Community Pharmacists Association, spread pricing is when a PBM charges Medicaid a higher price for a prescription drug that what they charge a health plan, and then the PBM keeps the "spread" as profit. 

The news conference is scheduled for 1:15 p.m. Thursday.