Democratic lawmakers amend major health care bill, remove public option provisions

Health care industry stakeholders move from opposed to neutral on HB-1232

By: - April 28, 2021 5:00 am
stethoscope on top of cash

(Getty Images)

State lawmakers on a House committee approved a major rewrite Tuesday of one of the most controversial bills of the 2021 legislative session.

Originally, House Bill 21-1232 would have created a two-phase path to a government-established, nonprofit-managed public option for health insurance. The Colorado Option would have kicked in, in phase two, if insurers failed in phase one to meet premium reduction targets for standardized insurance plans sold on the individual and small-group market.

The bill’s sponsors scrapped the second phase — the public option — after weeks of extensive negotiations with groups representing hospitals, doctors and insurance carriers. Most of those groups switched from an “opposed” to “neutral” position with the amendment, according to Rep. Dylan Roberts, an Avon Democrat who is HB-1232’s prime sponsor.


Roberts and the other Democratic sponsors, Rep. Iman Jodeh of Aurora and Sen. Kerry Donovan of Vail, say the bill will still take unprecedented steps to lower health care costs and improve access to care. Donovan and Roberts have worked for years on legislation to create a public option in Colorado.

Sen. Kerry Donovan represents the 5th District in the state Senate. (Colorado General Assembly)

“We never wanted to accept that there was nothing that could be done to change the status quo, which is what a lot of people wanted to tell us,” Donovan said during a Monday press conference announcing the amendment. “So excited to say that today, we did get folks to the table to do the hard work of figuring out how to decrease cost and increase choice.”

On a party-line vote of 8-5, the House Health and Insurance Committee voted to advance the amended version of the bill to the House Appropriations Committee.

The amended bill, like the original bill, will require private insurers to offer three tiers of a standardized individual plan and small-group plan on Connect for Health Colorado, the state’s health exchange. Such plans make it easier for consumers to compare provider networks, premiums, copays and deductibles when choosing an insurance plan to purchase. Under HB-1232, the standardized plans would all have to include certain mandatory health care services.

The goal of the amended bill would be to achieve an 18% reduction in average premium costs over three years as compared with 2021 rates. That target is lower than what the sponsors originally had in mind, which was a 20% reduction in average premium costs.

If that 20% reduction hadn’t been achieved in the first phase, the Colorado Division of Insurance would have, in the second phase, set reimbursements to health care providers at low enough rates to achieve the 20% reduction for the public Colorado Option plans. Hospitals that refused care to people with Colorado Option plans would have been penalized under a provision of the bill that still exists, though watered down, with the amendment.

During Tuesday’s committee hearing, Loveland Republican and House Minority Leader Hugh McKean questioned the sponsors’ depiction of hospitals as “profiteers” taking advantage of consumers by charging public and private insurers handsomely for care. McKean questioned whether any hospitals were making huge profits by overcharging people.

“There is plenty of evidence that that is happening,” countered Rep. Susan Lontine, the Denver Democrat who chairs the committee.

An analysis of federal data presented to the Colorado Business Group on Health in February found hospitals in Colorado have higher profit margins than any other state, the Colorado Sun reported at the time. The analysis by health care consultant Thomas Nash identified a 15.6% margin among all Colorado hospitals in 2018, but rural hospitals on the Eastern Plains made far less profit than many on the Front Range, according to the Sun.

Rep. Dylan Roberts
State Rep. Dylan Roberts, an Avon Democrat, represents Colorado House District 26. (Colorado General Assembly photo)

The concept of a public option for health insurance has been a key priority for Gov. Jared Polis’ administration and Democrats in the Legislature this session, but the major policy change revealed by sponsors Monday came after months of pushback from hospitals, insurance carriers and medical associations, as well as opposition from dozens of witnesses, including certified nursing assistants, doctors and union representatives who testified against the unamended bill during its April 9 hearing.

“Relief is on the way for Coloradans who are paying way too much for their health care,” Roberts said in a statement from Colorado House Democrats following the bill’s second hearing April 27. “The agreement we reached with some of the largest parts of the health care industry does exactly what Coloradans need and what we set out to do — create a new health insurance option for consumers and save them money.”

But under the amended bill, that option wouldn’t be a public option offered by a quasi-governmental nonprofit entity — a nonprofit set up by the government and managed by a separate board of directors — as laid out in the original proposal. Rather, the “new health insurance option,” as Roberts describes it, would be the standardized plans carried by private insurers.

HB-1232, as amended, would attempt to hold the industry accountable for meeting the 18% reduction target, but not by establishing a public option. Instead, the bill would create an insurance consumer ombudsman office and require public hearings on health care access and affordability.

According to the Colorado Health Access Survey, approximately 6.5% of Coloradans were uninsured in 2019. That number was higher in the Interstate 70 corridor and for certain demographic groups. For example, 1 in 10 Latino Coloradans were uninsured.

The sponsors of HB-1232 hope that by making it more affordable to purchase individual plans on the exchange, the legislation will help reduce the rate of uninsured people in Colorado.

“Race disparities in health outcomes are directly related to the fact that communities of color face higher uninsured rates and as a result have less access to the care they need,” Jodeh said in House Democrats’ statement. “Too many people in Black, Latinx and Indigenous communities go without essential health care or skip prescriptions because they can’t afford them, they don’t have insurance or their insurance doesn’t cover it.”

The Colorado Consumer Health Initiative, one of HB-1232’s main backers and an advocacy organization working to improve access to health care, supports the bill in its current form.

“Our fundamental goal is to lower costs, make health insurance more affordable, and improve access and equity,” and the amended bill checks all those boxes, said Adam Fox, deputy director of CCHI.

Up to 15% of Coloradans would be affected by the legislation, either because they already purchase individual or small-group plans on the exchange, or because they don’t currently have insurance for themselves, their family or their small business and may be interested in the lower-cost standardized plan, Fox said. Those Coloradans would be able to shop for standardized plan options on the exchange, but no one would be forced into choosing a particular plan.

Some Democratic lawmakers praised the sponsors’ work, as did the governor.

“This. Is. Leadership,” Rep. Julie McCluskie, a Democrat from Dillon, wrote on Twitter. “The health care system is complicated, and fixing it isn’t simple. But the legislature refuses to walk away and leave hard working Coloradans paying exorbitant prices for coverage. This is a big step forward!!”

House Speaker Alec Garnett, a Denver Democrat who supported efforts to craft the legislation, joined Roberts, Jodeh and Donovan during Monday’s virtual announcement of the major amendment.

“I’m really here just to compliment the sponsors and compliment the road that they have taken to get here,” Garnett said.


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Faith Miller
Faith Miller

Faith Miller was a reporter with Colorado Newsline covering the Colorado Legislature, immigration and other stories.