Health Care Industry Under Pressure To Lower Costs Or Compete With Government-Run Health Insurance Option

DENVER (CBS4) - Some state lawmakers have given the health insurance industry an ultimatum - lower costs or they will launch a state-run health insurance option. Under a new bill, insurers would have until 2025 to lower premiums on a standard plan by 20 percent - 10 percent a year starting in 2023 - or the state would move to phase two - a government-run insurance option.

The state would set reimbursement rates and providers would lose their license to practice in Colorado if they turn away anyone on the plan. State Rep. Dylan Roberts, the sponsor of the bill, says it would only impact those who buy insurance on the individual market and small group market. That's about 15 percent of Coloradans.

"We understand our healthcare industry has gone through a lot responding to the pandemic," said Roberts, who admits now may not be the best time for upheaval in health care. However, he said it's time the industry did something about the cost of care.

"They come to us all time and say, 'We know that costs are too high, we know prices are too high. If you let us have the time to reduce them, we think we can do it.' So, we take them at their word," he said.

Amanda Massey, with the Colorado Association of Health Plans, says insurers don't even know what benefits they'll need to cover in a standard plan. Until the Commissioner of Insurance decides that, she says, they won't know if a 20 percent reduction is even possible.

"We feel like we're being set up to fail," Massey said. "Ultimately, comes down to will providers and hospitals better negotiate with us or not."

State Rep. Iman Jodeh says the bill incentivizes providers. More affordable insurance, she says, will mean more insured Coloradans.

"Lowering it by 10 percent has the opportunity to bring in 70,000 Coloradans into the healthcare market," said Jodeh.

Jodeh is co-sponsoring the bill, in part, she says because she grew-up uninsured and has a pre-existing condition.

"I felt as if I was a burden on my family. I don't want any person to feel that pain and generational trauma," she added.

The state isn't waiting on the industry to lower costs before setting a public option in motion. The bill creates a quasi-governmental non-profit to begin seeking a federal waiver and federal dollars to fund start-up costs.

"When you look at the details, it actually is a modest proposal," said Roberts.