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Colorado Option Plan ‘falls short,’ think tank says

The Common Sense Institute says the state’s standardized health insurance plan will be more expensive than some non-state plans.
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A Colorado think tank released Thursday its analysis of the state’s standardized health insurance plan, which “falls short” of its promises, the organization said in a news release.

The Common Sense Institute says the Colorado Option Plan will be more costly for residents than some non-state plans, said Chris Brown, vice president of policy and research for the institute.

“In many markets, the non-Colorado Option plans will have lower premiums,” Brown said.

Under the Colorado Option Plan, however, health insurance providers are required to lower premiums on plans for individuals, families and small businesses by 15% by 2025.

That will likely result in medical providers cutting costs “in a way that impacts quality and access, or passing on costs to the remaining private insurance market through higher prices,” Brown said. 

The state’s regulatory policies have limited the number of health insurance options available to Coloradans, Brown said.

“In 2023, according to the latest data, there will be 91 fewer individual market plans offered than there were in 2022,” he explained.”There have been multiple regulatory changes that impact the ability to compete in Colorado.”

Those changes have added between $321 million and $405 million to health carriers in the individual, small and large group markets, Brown said, citing data from the Colorado Association of Health Plans

“At the end of the day, where we’re seeing Colorado’s health insurance market go is in the opposite direction of where I think everyone wants.”

The state’s insurance plan will be available in 2023 to all Coloradans who buy their own health insurance.

"The legislature, Governor Polis and organizations that care about people have worked hard over the last four years to put things in place to save people money on health care,” said Colorado Insurance Commissioner Michael Conway, in a statement. “That is shown by the $326 million in savings people can achieve next year that the Colorado Division of Insurance detailed in the Oct. 25 press release.”

Health insurance companies “at different points, fought all of those programs,” Conway said.

“So it should come as no surprise that health insurers and their special interest groups are continuing to put out misleading information about them,” his statement read. "We stand ready to work with organizations that want to save people money on health care. We sincerely hope that whoever is funding this misleading work from the Common Sense Institute will make the decision to engage in a more constructive manner moving forward."

Most of the $326 million in consumer savings cited by Conway already exist through the Colorado reinsurance program, Brown said. The policy has been in effect since 2020.

“I think Coloradans across the board should be aware of these numbers and estimates and be open to understanding the unintended consequences in whatever the next steps are,” Brown said.