Coloradans are understandably frustrated by the General Assembly’s failure to address rising health-care costs in the state of Colorado. Years of broken promises and failed experiments have left most Coloradans pleading for something — anything — that will make health insurance more affordable and accessible.
This same mentality is shared by many of my colleagues in the legislature. The difference, of course, is that we lawmakers have the ability to craft policy to help solve the problem. There is an unfortunate other side to that coin, however, in that we can, and often do craft policy that makes the problem worse. From what I’ve seen and heard from our doctors and hospitals, the proposed “public option” that Democrats have introduced would do just that.
It’s astounding how quickly our front-line medical workers went from heroes to zeroes in the eyes of my Democratic colleagues. Only a few months ago, they were our saviors, and now, they’re just in the way of progress on health-care policy. When it comes to health-care policy, it should set off a red flag that all of the major players — hospitals, doctors, nurses, and insurance companies — are all not supportive of the “public option.”
According to a recent impact study, approximately one third of Colorado’s rural hospitals are not making a profit at all. In fact, that study estimates that some 23 rural hospitals would be at risk of closure if the public option becomes law. For rural Coloradans, even if you could promise that their rates would drop, would it matter if there were no doctors or hospitals nearby to obtain care?
If you’re wondering how it is that the public option would put hospitals at risk of closure, consider that the public option seeks to dictate how much a doctor — or a hospital — can charge for a specific procedure or service. If 82 percent of Colorado hospitals are currently struggling to stay afloat, imagine what the consequences of an additional $2.3 billion in lost revenue will be on hospitals across our state, especially those in rural areas. “Cost savings” achieved by telling health-care workers that we are simply going to pay them a lot less is not sound public policy.
Another probable outcome is the shifting of costs. If a hospital is forced to charge 80% of what they’d usually charge (this is a conservative estimate) due to the public option, then perhaps they’d charge the next patient — who is not on the public option — 125% of what they’d usually charge in order to make up the difference. Especially for hospitals already struggling, this is a foreseeable consequence.
This, of course, is just another example of how one-size-fits-all governance doesn’t work.
In addition to the potentially devastating impact on rural Colorado, it’s also virtually assured that we’d soon see fewer choices in health insurance once the public option enters the market. Private insurers obviously cannot compete with arbitrary price caps for health-care services set by politicians and bureaucrats that only the “public option” has the authority to demand.
If you think that we could simply repeal the plan if things go awry and the “public option” becomes the “only option," single-payer plan that Gov. Jared Polis promised, ask yourself a simple question: when has the state government ever eliminated a program of this size and scope?
There are many other potential pitfalls to the public option, such as those outlined by Dr. Terri Richardson in her Colorado Politics op-ed, explaining how setting “arbitrarily low rates across the health care spectrum” could further increase racial disparities by pushing doctors and hospitals out of the most underserved communities. With Democrats proclaiming how laser-focused they are on reducing inequity, this bill manages to risk the exact opposite. Additionally, a report commissioned by the Polis administration estimates that the public option would reduce Colorado’s uninsured population by only 1.1 to 4.3 percent — a dangerously small gain considering the potential downside.
Sponsors of the bill will be quick to point out that the public option portion of the bill only kicks in if the health industry can’t achieve a 20 percent reduction in costs. However, as Democrats in the legislature continue to pass mandates and increase risk for insurance companies, and knowing that hospitals, physicians and pharmaceutical companies control the vast majority of those costs, that 20 percent reduction becomes a virtual impossibility.
I, too, seek solutions to our rising health-care costs. As somebody who has spent my entire private-sector career in insurance, it’s a complex industry with many deficiencies. What we must remember, however, is that the solution to these problems is rarely simple, and the remedies rarely apply equally to our diverse state. I remain committed to solutions that will drive down costs, expand choice, and improve accessibility, but this public option is not the way to achieve those goals.
Jim Smallwood, a Republican from Parker, represents District 4 in the Colorado Senate.