Colorado Democrats introduce public option health care as they take control of General Assembly

[Greenbeard]

Colorado, like many states, has struggled to find ways to keep premiums affordable in rural areas of the state. In particular, its Western Slope region has had some of the highest premiums in the country for years, which prompted the state to try redrawing the boundaries of its premium rating areas a few years back, combining some of the highest cost counties with lower cost regions to try and spread out some of those costs.

The newly seated General Assembly seems keenly interested in exploring more options:

Colorado Democrats introduce public option health care as they take control of General Assembly

Creation of a public option health care plan is one of the most ambitious changes Colorado Democrats proposed Friday as they kicked off a new session of the General Assembly in control of both chambers for the first time in four years.

The first five bills introduced in each chamber — indicators of lawmakers’ top priorities for the year — largely relate to health care and education costs.

A Senate bill would create a public option health insurance plan that Coloradans who live in the highest-cost areas — mainly the Western Slope — could buy instead of their current insurance starting in the fall of 2019. A House bill would expand that program to the entire state by the fall of 2020.

“You’d be buying a plan that’s at Medicare reimbursement rates,” said Rep. Dylan Roberts, D-Avon, who is sponsoring both bills. “It could potentially be administered through a nonprofit like Kaiser, but it’s not a private company plan.”

Democratic lawmakers have sought to bring change to Colorado’s health care system for years, but the combination of majorities in both the Senate and House and Jared Polis’ election as governor could be a game-changer. Health care reform was a central theme of Polis’ campaign. Senate Democrats say Polis didn’t have input on their bill but was kept updated as it was crafted.

The reason for separate bills is because a statewide public option would require a waiver from the federal government, but the pilot program would not.

The pilot bill is interesting but understandably narrow in scope. It would direct the state's HR leadership to explore the feasibility of launching a pilot to allow up to 100 folks whose incomes put them just over the threshold for ACA premium subsidies and who live in two particularly high-cost counties to seek coverage through the state employee health plan. That would be an opportunity to join the group plans--administered by United Healthcare and Kaiser Permanente--currently available only to state employees instead of buying in the individual market. Even a modest pilot like that would require a lot of thinking through as to whether that approach could be made workable and how to do it, so this bill would authorize that thinking and design work to proceed and, if the idea turns out to be feasible, move forward with implementing a pilot.

The other bill directs the state's Medicaid and insurance agencies to work together to come up with a proposal for "a state option for health care coverage that uses existing state infrastructure, increases competition, improves quality, and provides stable access to affordable health insurance." The parameters for what that could look like are left largely undefined, though those agencies are required to review any relevant information that comes out of the pilot program in the other bill. Contra what the Rep sponsoring the bill is quoted as saying in the article above, there's nothing in his bill that would require the state option to pay at Medicare rates. Rather, the bill requires the agencies developing the proposal to "evaluate provider rates necessary to incentivize participation and encourage network adequacy and high-quality health care delivery." That could be Medicare rates or it could be something higher.

Anyway, it will be interesting if these bills pass, as that's when the real work will start.

 

[Chomsky]

The Colorado of today, seems to really be becoming quite the progressive state. It wasn't always like this, back in the day.

 

[Checkerboard Strangler]

The Colorado of today, seems to really be becoming quite the progressive state. It wasn't always like this, back in the day.

Colorado has been "two states" for about the last thirty five years.
Colorado Springs is considered the "capital" of "conservative Colorado" while towns like Boulder are considered a little more to the liberal side.

 

[Chomsky]

Colorado has been "two states" for about the last thirty five years.
Colorado Springs is considered the "capital" of "conservative Colorado" while towns like Boulder are considered a little more to the liberal side.

Colorado Springs is the Colorado I knew when I visited in my teens. It was still a cowboy town of sorts, then. But what a view!

 

[Bum]

Colorado has been "two states" for about the last thirty five years.
Colorado Springs is considered the "capital" of "conservative Colorado" while towns like Boulder are considered a little more to the liberal side.

Its exceptionally large military footprint may have something to do with that.

 

[ttwtt78640]

The legalese used in the bill makes me wonder what current CO state employees must pay as their "fair share" of their employer (taxpayer) subsidized group medical care insurance plans. I assume that the employee payment amount varies based on whether it is employee only coverage or employee plus spouse and children coverage. This "pilot program" seems to allow a select group (of 100 people?) to join the thousands of CO state employees in getting employer (taxpayer) subsidized medical care insurance plans based on their zip codes and moderately low incomes rather than state employment.

What is not clear is what (if anything) those added to the state employee's group plan must pay as their "fair share" and how it would be paid since, obviously, it can't simply be deducted from their state employment paychecks. What this seems to do is include (at present just a few) "poor folks" in the same pool as state employees and to give them state subsidized insurance perhaps with no need to pay their own "fair share" of premiums as the state employees enrolled in those insurance plans now do.

While I like the idea of a public option it should be available to all, not heavily subsidized and not limited to only "poor folks".

 

[Greenbeard]

I assume that the employee payment amount varies based on whether it is employee only coverage or employee plus spouse and children coverage.

Yes, options for CO state employees are similar to most employer-based plans. The employer contribution will cover ~70-95% depending on the plan selected and the family size.

What is not clear is what (if anything) those added to the state employee's group plan must pay as their "fair share" and how it would be paid since, obviously, it can't simply be deducted from their state employment paychecks. What this seems to do is include (at present just a few) "poor folks" in the same pool as state employees and to give them state subsidized insurance perhaps with no need to pay their own "fair share" of premiums as the state employees enrolled in those insurance plans now do.

This isn't for poor folks, pilot participants have to have incomes between 400%-500% FPL to participate. It's for those people who make too much to qualify for federal premium tax credits and thus have to pay full freight on plans in the marketplace. The participation of those people would be administered separately from state employees (how to do that is one of the items to be explored).

I don't see anything that suggests the state intends to subsidize their premiums. Indeed, in assessing the feasibility of a pilot, one of the factors the state personnel director is directed to consider is:

(V) whether enrollment in a group medical benefit plan will reduce premium costs for eligible individuals in comparison to the premium costs for an individual health benefit plan available to eligible individuals in the private market, including through the Colorado Health Benefit Exchange created pursuant to article 22 of title 10, and whether the state would need to contribute a portion of the premium amount to effectuate reduced premiums for eligible individuals

If the state would need to kick on money to make these premiums lower than exchange premiums, I'm going to guess that would be a strong strike against feasibility (also there would be no point to the pilot).

No, the point is to bring another option to the market for middle-class people who live in two high-cost areas in the state's Western Slope that are only served by a single insurer.

They still need to figure out whether it makes sense to do that and how. The CO state employee plans are a mix of fully insured and self-funded plans. In the former, the insurer is setting a premium based on the aggregate heath profile of those who choose to enroll in it. In the latter, the state of CO as an employer is just putting aside money to pay the claims expenses of enrollees itself. A big part of the feasibility study would be determining if it makes sense to let outsiders buy into one kind of plan, or either, or neither.

If they can buy into fully insured plans, would the insurer selling the state the insurance even let them do that? And what are the implications for premiums? If they can buy into the self-funded plans, how do you make sure that doesn't impact the solvency of the plan (which doesn't exactly have traditional premiums like a fully insured plan)? These questions are particularly important in light of the question: Would this new option disproportionately attract older and sicker enrollees? Marketplace premiums are age-rated, whereas per usual in employer plans the CO state employee plans are not. All things being equal, that should make the marketplace plans relatively more attractive to younger people, and the state employee option more attractive to older people.

Indeed, if this option were widely available (i.e., beyond just a 100 pilot participants and their families) and that sort of age sorting actually took place, the problem would likely exacerbate itself over time as the premiums for the state employee option rose and those offered by Anthem BCBS in the marketplace stayed the same or dropped as its older enrollees were siphoned off to the state. I can't imagine current state employees would be happy with that scenario. Of course if older marketplace enrollees are actually relatively younger than the average state employee (maybe it's an old workforce!) then it could be a win-win for everyone. This is the sort of thing that needs to be explored if this bill passes.

Like I said, it would be an interesting experiment. I'm not particularly optimistic that a state employee plan buy-in would be a particularly good option for a statewide public option like that contemplated in the other bill. So this pilot probably wouldn't be a template for the big public option, but that doesn't mean there is not a lot that could be learned from it.

 

[Greenbeard]

The other bill directs the state's Medicaid and insurance agencies to work together to come up with a proposal for "a state option for health care coverage that uses existing state infrastructure, increases competition, improves quality, and provides stable access to affordable health insurance." The parameters for what that could look like are left largely undefined, though those agencies are required to review any relevant information that comes out of the pilot program in the other bill. Contra what the Rep sponsoring the bill is quoted as saying in the article above, there's nothing in his bill that would require the state option to pay at Medicare rates. Rather, the bill requires the agencies developing the proposal to "evaluate provider rates necessary to incentivize participation and encourage network adequacy and high-quality health care delivery." That could be Medicare rates or it could be something higher.

Anyway, it will be interesting if these bills pass, as that's when the real work will start.

And we have a winner. This bill (final text here) was signed by Governor Polis on Friday.

The proposal for a public option leveraging existing state infrastructure is due from those executive agencies on or before November 15.

Gov. Polis signs laws aimed at lowering health care costs

DENVER - Three bills aimed at lowering the cost of health care in Colorado were signed into law Friday by Gov. Jared Polis.

Colorado legislators worked during the assembly session to pass bills that would create a publicly supported health insurance option, create a reinsurance waiver program to offset high-cost insurance claims, and give more options to healthcare cooperatives.

HB19-1004 lets the state start developing a public health insurance option, which should provide competition in areas that have few insurers. Lawmakers hope to have the insurance available for purchase by fall of 2020.

 

[joko104]

I think all of this should be at the STATE level.

Then live in the state you want to live in. High taxes with lots of services. Low taxes with few services.

For all the talk of how wonderful social and cultural diversity is, why do progressives demand there be no diversity at all?

 

[Ikari]

Its exceptionally large military footprint may have something to do with that.

Also the mega churches, lol.

 

[Greenbeard]

I think all of this should be at the STATE level.

Then live in the state you want to live in. High taxes with lots of services. Low taxes with few services.

For all the talk of how wonderful social and cultural diversity is, why do progressives demand there be no diversity at all?

There's plenty of diversity in health insurance and health are markets. If every marketplace in the country had a public insurance option available, they'd still be incredibly diverse.