Jim Smallwood

Lower costs. More choices. Improved health care outcomes. Greater savings.

These are just a few of the promises made to Coloradans in 2021 by backers of HB21-1232 — the law that established the state government-controlled health insurance plan commonly known as the “Colorado Option.”

And quite frankly, these are laudable goals. Each of those promises are exactly what Coloradans want and should expect from health care policy put in place by their state government.

The problem is the Colorado Option has failed to deliver on them. In fact, two years after HB21-1232 was signed into law, we are learning not only did the Colorado Option not keep those promises, but its creation potentially exacerbated the problems it was ostensibly supposed to solve. Now, instead of realizing their misstep and working to correct the problem, some in the state legislature are intent on making it worse.

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The idea, as it was sold two years ago, was the establishment of a public, state-backed insurance plan would provide a lower-cost option that would place competitive pressure on private plans to lower their costs in turn. It looked great on paper.

In reality, it hasn’t worked out. To begin with, in most counties in the state the Colorado Option is not the most affordable choice for consumers shopping for health insurance for the 2023 plan year. In most cases, traditional, private health plans offer the best rates.

Those that are left, that is. Perhaps the most concerning part of the Colorado Option is the plethora of burdensome regulations created by this one-size-fits-all system, coupled with the attempted undercutting of the private market by the public plan, are taking place at the same time insurance providers are abandoning our state. Like any market, Colorado’s health care market needs a competitive environment to help keep prices down for consumers. Far from spurring competitive pressure on the health insurance marketplace, the Colorado Option very well may have been one of the contributing factors that pushed many of the few existing carriers out of the market in the past several months.

To put it simply, the “Colorado Option” has been a failure.

This is not simply anecdotal, or the type of hyperbole that seeps into most issues we discuss these days; the reality of the Colorado Option’s failures has been well-demonstrated empirically. This week, for instance, the actuarial health care consulting company NovaRest confirmed with hard data what most of us signing up for health insurance have already seen with our own eyes and felt in our own wallets: that for the 2023 plan year in the individual market, the Colorado Option Plans fail to offer the lowest premiums to consumers shopping on the health care exchange. This is true in 60 of 64 counties for the bronze tier, 54 of 64 counties for the silver tier and 32 of 64 counties for the gold tier.

The study goes on to say the law’s premium reduction targets are “unrealistic,” finding that a “significant majority (85%)” of Colorado Option plans did not meet the 5% target premium reduction for 2023.

On top of that, the restrictions and financial pressures that HB21-1232 imposed on the private insurance market have forced many private carriers in the individual and small-group market to leave the state, and made it virtually impossible to attract new carriers to replace them. Thousands of Coloradans have been forced onto the more expensive public option, directly because the law creating that option forced their existing carrier to leave the market.

Where are anti-trust laws when you need them?

Colorado is only the latest example of how government-controlled insurance systems do not work. But as the Colorado Option’s failures continue to mount, the General Assembly is considering two pieces of legislation that would double down on the law.

House Bill 23-1224 attempts to further tip the scales in favor of state government-controlled plans by giving even more power to the insurance commissioner in how and in what order the Colorado Option plans are displayed to purchasers on the Connect for Health website, and potentially leaving Coloradans with fewer choices and less control over their own health care. Meanwhile, HB23-1209 purports to once again “study” what single-payer health care might look like in Colorado. Such a study is unnecessary — Colorado has already undertaken a test-run of single payer-lite, and the results, to say the least, are unimpressive.

It remains to be seen whether Gov. Jared Polis will continue to work toward fulfilling his campaign promise to “offer a universal, single-payer option”, as he stated in an op-ed published in the Aspen Times in 2018. However, I feel it’s time for both the legislative branch and the Governor’s Office to see the results of their experiment and acknowledge the “Colorado Option” has made health care neither more accessible nor affordable. The legislature should be advancing policies that ensure more Coloradans have the high-quality health coverage and care they need. Doubling down on a failed experiment is not the way to do that.

Jim Smallwood is the State Senator for District 2 in Douglas County, and Ranking Member of the Senate Health and Human Services Committee

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