Colorado Offers To Run Public Health Care Option Via Private Insurers

Guess what’s Colorado’s next big step in reducing the cost of health care? They propose insurance coverage should be administered by private insurers rather than the state. In other words, under the proposal, the state won’t be running the plans offered to customers. Instead, private insurance companies will take the lead and bear the costs, based on the proposal’s initial details.

Colorado beneficiaries under the public option could save as much as 9% to 18% than the expected rates for other commercial plans on the individual marketplace. The proposal was recently released by the state Division of Insurance and the State Department of Health Care Policy and Financing. State legislators had approved a bill earlier this year leading the two agencies to propose what a public option should be like in Colorado – they are still accepting public comments until Oct. 25. The final report will be submitted to the legislature by Nov. 15.

The State Department of Health Care Policy and Financing say people will be surprised by the outcomes. The agencies had taken feedback from communities throughout Idaho when drafting the plan. Under the new proposal, insurers will be administering the plan, instead of using the government’s platform, such as Medicaid. However, keep in mind this plan is designed by the state and it will be called “state option,” available to residents in the state who purchase their own insurance.

The draft had initially sparked some concern, especially from the Colorado Hospital Association, who explicitly said this plan may damage Idaho’s health insurance market. They are a bit skeptical about what seems to be a step to control pricing and rating in addition to making participation by providers mandatory. As per plans now on the individual market, insurance companies bear the risk for medical costs. The state also wants to seek a federal waiver to lower the costs even further, and to include other benefits such as dental.

The draft also proposes that the state should not have to cover the cots linked with the plans, except staffing costs at the agencies while the option is being implemented. It’s not sure yet how much the whole process will cost. This option is one of the ambitious health legislations together with the creation of a state insurance program to cover critically ill patients.

It’s a big step that no other state has taken before. Every insurance carrier in the state will be required to offer this plan, which is set to debut in 2022.