DENVER, CO — The House Committee on Health and Insurance advanced legislation today to create the Colorado Affordable Health Care Option. HB20-1349 passed the committee by a vote of 7-4. 

“The number one issue I hear about across my district and in the Capitol is the high cost of health care and the lack of choices on the individual market,” said Rep. Dylan Roberts, D-Avon. “The Colorado Option is a common sense and financially responsible way to create a new choice for consumers. It’s expected to reduce premiums on the individual market by up to 20 percent and ensure that more Coloradans across the state have access to affordable, high quality health care. The status quo in health care is hurting too many Coloradans and it is well past time we pass this bill.” 

“Hospital and health insurance lobbyists and CEOs are attacking the Colorado Option and the prospect of lower health care premiums because the status quo protects their profits – at the expense of consumers,” said Rep. Chris Kennedy, D-Lakewood. “Hospitals in Colorado have the second highest profit margins in the country and it’s time to end the status quo and bring relief to Colorado consumers.”

The Colorado Affordable Health Care Option aims to lower the cost of health care and increase competition. The Colorado Option will offer a similar benefit design and structure to existing plans offered on the exchange while reducing premiums by nine to 20 percent, depending on the region, by holding the skyrocketing profit margins at the state’s largest hospitals in check. It also asks insurance companies to spend less on overhead and more on patient care and ensures prescription drug rebates are passed along to consumers to lower the cost of insurance. 

Coloradans face some of the highest health care costs in the nation. In 22 of 64 counties, consumers only have one carrier to choose from, and cost barriers have led to one in five Coloradans forgoing needed care. High consumer spending on health care means Coloradans have less money to spend elsewhere in the economy. The Colorado Option will also allow more Coloradans to start their own business without the fear of losing affordable health insurance. 

The high cost of health care is largely driven by unprecedented growth in hospital profits. Between 2009 and 2018, hospital profits in Colorado increased 280 percent, and hospital prices increased 71 percent while patient growth increased just 16.6 percent. Hospitals account for over one-third of health care spending in the state, which is approaching $50 billion a year. 

Because hospital corporations account for some of the highest profits in the health care industry in Colorado, the Colorado Option asks some of the largest, most profitable hospitals in the state to take a small cut in their profits to reduce the cost of care and pass along the savings to consumers. The hospital reimbursement rates set by the Division of Insurance will be public and transparent and will start at a base rate that guarantees hospitals a profit and then increases if hospitals meet certain criteria. The bill also supports rural and critical access hospitals by ensuring that they still have a profitable reimbursement rate under this plan. Notably, some critical access and independent hospitals are actually poised to see an increase in their overall reimbursement rates under the Colorado Option. 

Instead of cutting back on their exorbitant profits to keep care affordable, the largest hospitals have threatened to further raise costs on consumers. Hospitals have deployed this policy, known as cost-shifting, in the past to recoup spending on care provided to uninsured patients. HB20-1349 anticipates that hospitals will try to protect their profits, and the bill includes robust protections to help prevent cost-shifting.

Hospitals have engaged in an expensive lobbying and public relations campaign to protect their bottom line. They are once again expending resources to pad their own profits, pay high-priced lobbyists and buy countless television and online ads that instead could be spent on reducing the cost of care for Coloradans who are suffering under unaffordable health care prices. 

The Colorado Option bill now moves to the House Appropriations Committee for further action.

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