CO health officials release draft of state health-insurance option

DENVER — After four months of input-gathering, state officials released a blueprint Monday evening that could become a state-owned and operated health-insurance marketplace.

Spurred by the passage of House Bill 1004, officials from the Colorado Division of Insurance and the Department of Health Care Policy and Financing submitted the 196-page report, claiming that state residents could save between nine to 18 percent on their monthly premiums compared with the markets created by the Affordable Care Act, and reduce out-of-pocket costs by between $69 million to $133 million.

The policy would reach these savings by reducing the reimbursement rate from the current rate of about 289 percent of Medicare’s baseline reimbursement rate on the current individual market to between 175 percent to 225 percent for insurers on the state market, while framing the state option in a way that would keep patients eligible for ACA subsidies and tax credits.

Insurers would also be required under the plan to use rebates and other compensation from drugmakers to reduce prices on individual policies, and would have to spend 85 cents per every premium dollar on consumer care compared with the ACA’s 80 cents per dollar.

In particular, the plan’s authors emphasized that the option would be available in every county in the state, including the 22 that will have only one insurer by 2022.

However, the plan faced criticism from industry leaders almost a month before it was released. The REMI Partnership, a policy group made up of the Colorado Association of Realtors, Colorado Bankers Association and other policy and economic groups, argued in its own report in September that a state-run plan would undercut reimbursements between $494 million to $1.4 billion, cause thousands of health-care job losses and ultimately increase the price of coverage for employers and crimp job growth.

The option could launch as early as January 2022, but requires the Colorado Legislature to enact it as a bill. The two state agencies in charge of the plan are now taking public comment through Oct. 25. before sending a final report to legislators due Nov. 15.