Medical professionals in white coats were seen all over the state Capitol Friday, on hand to testify both for and against the Colorado Option Health Benefit Plan Act.
On the third try, House Bill 1232 got in front of the House Health & Insurance Committee Friday in a 10-hour hearing that drew more than 100 witnesses to the Capitol or to testify remotely.
But negotiations between bill sponsors and the healthcare industry that went on all day Friday meant that the bill was not ready for action, including amendments. That's now delayed until Tuesday.
The bill has been a battle royal between the Polis administration and the healthcare industry.
As introduced, HB 1232 gives the healthcare industry — doctors, hospitals and health insurers — two years to reduce health insurance premiums by 20% (10% per year) in the individual and small group market. The individual market is about 8% of insured Coloradans; the small group market, which is small businesses with 1 to 100 employees, is about 15% of insured Coloradans.
At the same time, however, legislators would be allowed to continue passing laws requiring insurers to add health benefits, which the industry says would add costs. That’s not favored by Gov. Jared Polis, who told lawmakers last year to stop sending him bills that added benefits to health insurance plans.
If the premium targets are not met after two years, in the third year, the Commissioner of Insurance would come up with the Colorado Option Plan, with its major provision setting price caps on health care services provided by hospitals and doctors. The plan would be administered by the Option Authority, a nine-member quasi-governmental nonprofit entity.
Insurers would be required, under the bill as introduced, to offer the option plan; doctors and hospitals would be required to accept it or risk their licenses.
The goal of HB 1232 is to promote equity within the healthcare market, to address historic deficits in health care for rural Coloradans, underrepresented minorities and undocumented immigrants.
Despite a draft strike-below amendment that was substantially different from the original bill that floated around the Capitol earlier in the week, the hearing on Friday started off under the bill as introduced.
“No one is forced” into buying into the Colorado Option, said bill cosponsor Rep. Dylan Roberts, D-Vail. Should this bill pass, Coloradans who buy their insurance on the individual market — regardless of race, income, geography or immigration status — will see cheaper premiums and fewer out-of-pocket costs with better coverage, Roberts told the committee.
Cosponsor Rep. Iman Jodeh, D-Aurora, said the bill has three goals: to implement a standardized plan with better pre-deductible coverage and lower out-of-pocket cover costs; to create meaningful, lower insurance premiums; and to reduce and address health inequities. HB 1232 is a long-term solution, she said, to create affordable insurance options that works within the existing insurance marketplace to make it easier for Coloradans to afford and access health insurance, she said.
The costs of health insurance are such that even those who have it don’t use it because they can’t afford the care, and it’s even worse for people of color, she said, who can’t afford the insurance at all.
The bill will also benefit rural Coloradans, who face some of the highest health insurance costs, the sponsors said. Roberts noted that the counties he represents are noncompetitive, with only one choice for health insurance.
If the bill passes, 18,000 Coloradans who are uninsured will become insured, Roberts said.
“We are seeing this bill in the worst year ever,” said House Minority Leader Hugh McKean, R-Loveland, who replaced Rep. Ron Hanks, R-Fremont County, on the committee for Friday’s hearing. That includes increased costs for personal protective equipment and staffing challenges. There are parts of the industry not included in the bill that also contribute to costs, such as the pharmaceutical industry, McKean asked, why aren’t they included?
Roberts responded that the bill’s two-year phase one gives the industry time to “build out” of the pandemic, but didn’t answer why the pharmaceutical industry wasn’t included.
Rep. David Ortiz, D-Littleton, was one of the most aggressive in questioning opponents of HB 1232 and in support of the bill. “Let's not pretend” that before the pandemic, hospitals were making record profits, which he estimated at 200%. “Did we see a 200% increase in the people covered? No. A 200% increase in quality of care, or nurses and CNAs getting 200% increases in pay? No.”
Plenty of doctors signed up to testify on HB 1232, most of them opposed. Dr. Mark Conklin, an orthopedic surgeon in metro Denver, questioned, as others did later, where the 10% per year figure came from. For the last two decades, he said, physicians and hospitals have been working to cut costs behind the scenes, while at the same time seeing a decrease of 30% in Medicare reimbursements and a 60% increase in overhead.
Conklin said he and his partners cannot support a cost reduction that has no reassurances that they will not have to weigh their own livelihood with the outcomes of patient care. “Please do not put us in that position,” Conklin said. He also noted the state authority that manages the plan would have only one medical professional among its nine members, which he said could result in the board lacking the knowledge and experience necessary to make tough decisions on how to cut costs without affecting patient care.
In favor of the bill, Adam Fox of the Colorado Consumer Health Initiative said Coloradans shouldn't have to think twice about getting the care they need because of the costs, “but that's exactly where we are.” HB 1232 will hold the healthcare industry accountable to provide lower healthcare costs, and ensure Coloradans have access to more affordable health insurance options that provide consistent value while improving health equity.
Karla Gonzales Garcia of the Colorado Organization for Latina Opportunity and Reproductive Rights, testified in favor of providing healthcare for undocumented immigrants and people of color.
"You must do more to create an option that won't only work for white people, rich people, or for people for whom the systems have always worked,” she said.
Dr. Chip Cedars is a retired doctor in Greenwood Village, and one of the few doctors to testify in favor of HB 1232. He said he will never forget his patients who asked how long they could put off costly treatment or wait to come in for a worsening health issue because of the cost. Some patients stopped coming altogether after losing jobs and insurance.
“Many of these patients were people of color who have the cards only further stacked against them,” Cedars said. Every Coloradan deserves to get the care they need when they need it, he added.
Small business owners told the committee about the challenges they face in getting quality employees when they can’t offer health insurance as a benefit. "We need a sustainable solution from our state legislators” to help do that, and HB 1232 is a common-sense solution that will level the playing field for small businesses, said one business owner.
Dr. Robert Vissers is CEO of Boulder Health, one of the last two independent community hospitals on the Front Range. He’s seen the flaws in the current system and the need to address access and equity, he told the committee. “I've never been more proud of how we served as a health system” during the pandemic but it was a significant financial blow, Vissers said. He believes HB 1232 will result in cost-shifting from the individual and small group market to the employers in the large group market. And it could lead to his hospital being acquired by a larger system.
Health plan executives and hospital CEOs also questioned the 20% premium target, asking whether it came from an actuarial analysis. No one responded.
The bill also drew opposition from several unions, including the Pipefitters Local 208, a frequent donor to Democratic lawmakers, and the Service International Employees Union, which represents healthcare workers at Kaiser Permanente.
Dr. Reginald Washington, CEO of Rocky Mountain Hospital for Children and Presbyterian St. Luke’s in Denver and a pediatric cardiologist, has watched health care evolve over the last 30 years. The hospital loses a lot of money on some kinds of care, including cancer and neonatal, he told the committee. His hospitals also do outreach in communities on the Western Slope, which they will not be able to continue to do should the bill pass.
Several hospital and health plan officials agree that health care costs are too high, including Dean Sanpei of Centura Health. “We agree with the goal of lowering healthcare costs. We have concerns about the way the bill proposes to get there,” he said.
Many of those opposed to HB 1232 pointed out that they have supported the myriad of bills intended to reduce health care costs in the past few years.
“We supported the reinsurance bill, the out-of-network bill, the community benefit bills, the hospital transparency bill,” said Janie Wade of SCL Health, who pleaded with the committee to recognize the value of the work done in the past, and build on those efforts, "rather than relying on this untested approach that we believe will destabilize the healthcare system.”
At the end of nearly 10 hours of testimony, the committee heard from Commissioner of Insurance Michael Conway.
"The healthcare market has long said it can address consumer affordability and it does not need the government to intervene to meet that goal. The problem is that they have not delivered on that promise," Conway said.
Should the industry fail to deliver, Conway said, the standardized plan, known as the Colorado Option, will help drive down deductibles and cost shares while making it easier for consumers to shop and compare plans.
"And by standardizing benefit design through this bill, we can build in benefits ... like mental health services, in order to help people through these challenging times," he said.
Conway sidestepped a question on claims made by the industry earlier in the day that the option plan would result in shifting costs from the individual and small group market to the large group market, defined as employers with more than 100 employees.
Rep. Dave Williams, R-Colorado Springs, asked Conway if people will be able to keep their doctor or their current insurance plan, should the second phase — the option plan — be implemented.
*Conway replied that the bill is designed so that the networks will be broad. "So the doctors will be in the network. Hospitals will be in the network. I can't promise you that in 2025 what the world will exactly look like, but that's the full intent of the bill."
Following the hearing, Tyler Mounsey of Colorado's Health Care Future said in a statement that "after many hours of testimony from doctors, providers, workers, stakeholders and voices across Colorado repeatedly expressing serious concerns about the proposed state government option that could increase costs and put politicians in control of Coloradans’ health care, the bill sponsors decided to pause and reconsider the bill ahead of next week’s scheduled meeting. The steady drumbeat of Coloradans warning of negative consequences and unaffordable costs of their proposal raised serious questions for the committee."
Clarification: story updated to clarify remarks from Commissioner Michael Conway.