Polis signs executive order on health care office

Gov. Jared Polis signs an executive order creating the Office of Saving People Money on Health Care on Jan. 23, to be run by Lt. Gov. Dianne Primavera, at left.

The first two bills tied to the health care agenda of Colorado Gov. Jared Polis are already moving through the state legislative process — although, if passed, it will likely be at least a couple of years before Coloradans see results.

House Bill 1004, which would set up a study on a “public option” for health insurance, won approval from the House Health & Insurance Committee on Jan. 23 on a 9-2 vote.

Polis, in signing an executive order last week that created the Office of Saving People Money on Health Care, mentioned the public option bill and another that would allow Coloradans to obtain prescription drugs from Canada. Both were part of his health care agenda on the campaign trail in 2018.

Public option insurance is a state-run plan. It’s not out of the ordinary; Colorado has, for more than a century, had a state-run workers compensation insurance plan, known as Pinnacol Assurance, which is the insurer of last resort for any business that can’t get workers comp elsewhere.

Under a public option plan for health care, those who can’t afford private insurance — mostly individuals and families who don’t get health insurance from an employer or from Medicaid or Medicare, and have to buy it on the private market — would be the chief customers for the public option.

But a public option for Coloradans facing high health insurance costs is still at least two years away.

House Bill 1004 is sponsored by Democratic Rep. Dylan Roberts of Avon and Republican Rep. Marc Catlin of Montrose, who point out that 14 counties in the state — virtually all rural and mostly on the Western Slope — have only one insurance carrier.

That’s driving up the cost of health insurance to the point of unaffordability, according to West Slope residents like Janet Jordan, who told Colorado Politics last year that health insurance has turned into “an anti-benefit” because of rising costs. Jordan, who owns a woodworking business in Eagle, can afford only to pay half the cost of health insurance for her 15 employees and nothing for their families.

Less than 50 percent of Coloradans get their health insurance through their employers, according to a fact sheet on the bill supplied by Healthier Colorado, and the plan that could come from House Bill 1004 would address that gap.

Under the bill, the departments of Health Care Policy and Financing and the state Division of Insurance would team up to propose a state-backed public option design, including costs, benefits and implementation. Those who get their health insurance from their employers could keep that insurance.

The study is due back to the General Assembly by Nov. 15 and will then be reviewed by legislative committees and the Joint Budget Committee. Should the state decide to pursue a public option, it would have to apply for a waiver from the federal government, a provision under the Affordable Care Act that went into effect in 2017. Known as a “1332 waiver,” it allows states to “fashion a new coverage system customized for local context and preferences while still fulfilling the aims of the ACA,” according to the National Conference of State Legislatures. Eight states have already been approved for those waivers. In the past year, they have included Wisconsin, Maine and New Jersey.

The bill “is a uniquely Colorado solution,” Roberts told the Health and Insurance committee during a Jan. 23 hearing. If the legislature is okay with the plan, the state can apply for the waiver using existing funds from the federal government. If approved, the plan would go into effect Jan. 1, 2021. The federal funds are from the Affordable Care Act, which has a provision for innovative state plans, Roberts told Colorado Politics.

Catlin said that in the four counties he represents, there’s only one insurance option.

“I want to be good about creating competition and give people access to health care coverage," Catlin said, adding that he signed onto the bill because it’s a study, “not a foregone conclusion. ... I didn’t have to have my arm twisted.”

This idea of investigating the public option makes sense, he added.

County Commissioner John Messner of Gunnison County told the committee that residents of rural Colorado pay at least $500 more per month than those who live on the Front Range, which he called an “undue and resolvable problem.” Those who go without frequently cite the cost, he said.

One reason for expanding a public option is to foster competition in regions of the state where there isn’t any, said Christine Fallabel of the American Diabetes Association, also citing the 14 counties where there is only one carrier. “This simply shouldn’t be happening in 2019,” she said.

While they didn't testify against it in the Jan. 23 hearing, health insurance companies have expressed the strongest reservations about public option insurance.

In August 2009, while a similar option was being proposed as part of the Affordable Care Act, the CEO of Aetna, Ron Williams, told the PBS NewsHour that the public option creates "a player in the industry who is a participant in the market, but also is a regulator and a referee in the game. We think that those two roles really don't work well."

House Bill 1004 comes with a cost of nearly $500,000 over the next two fiscal years to conduct the study. It is now awaiting action from the House Appropriations Committee.

The second bill that fits into the Polis agenda is regarding the ability of Coloradans to import prescription drugs from Canada. Senate Bill 5 is sponsored by Democratic Sens. Robert Rodriguez of Denver and Joann Ginal of Fort Collins.

Rodriguez said he became interested in the idea when it surfaced in 2018, sponsored by his predecessor, then-Sen. Irene Aguilar of Denver. Such a plan also would require a federal waiver from the Department of Health and Human Services.

The bill tasks the Department of Health Care Policy and Financing with coming up with a program for importing prescription drugs from Canada. For example, the cost of Hepatitis C medications are about $1,000 per dose, Rodriguez said. In Canada, it’s $200 cheaper. And Canada has a drug approval system that’s relatively close to the one operated by the Food and Drug Administration in the United States, Rodriguez said.

Vermont has already embarked on the road to importation; its governor approved it last year for the 17 most costly prescription drugs. Under Vermont’s bill, a state agency acts as the wholesaler, as opposed to Colorado’s bill, which requires HCPF to select a pharmaceutical wholesaler. Only drugs with significant savings are eligible under the Vermont program, which is awaiting its waiver from the federal government.

But US pharmaceutical drug companies largely oppose such efforts.

When Vermont was working on its importation legislation, Pharmaceutical Research and Manufacturers of America (PhRMA) Director of Public Affairs Caitlin A. Carroll said it is "highly irresponsible for Vermont legislators to promote an importation scheme that would create more avenues for counterfeit drugs to enter the country in the middle of an unprecedented opioid crisis," according to HealthLeaders, an online publication of Simply Compliance, a Tennessee-based company.

No one testified against the public option bill. However, on Tuesday, a representative from PhRMA notified Colorado Politics that they oppose the Senate bill, pointing out that to date, "not a single Secretary of the U.S. Department of Health and Human Services has been able to certify that importation will both pose no additional risk to public health and safety, or generate cost-savings that are passed on to American consumers." In addition, foreign governments, including Canada, will not guarantee that drugs imported from other countries are safe and effective, and there's no guarantee that any savings will actually be passed along to consumers.

Senate Bill 5 is scheduled for its first hearing on Thursday in the Senate Health and Human Services Committee.

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