Democrats in the Colorado legislature on Monday said they are setting aside their contentious effort this year to pass a bill creating a public health insurance option.

The prime backers of the legislation, House Bill 1349, say the coronavirus crisis has made it impossible to ensure that all of the relevant stakeholders — hospitals, doctors and insurance companies — can be involved in the lawmaking process.

The proposal to create a hybrid public insurance option in Colorado forged ahead Wednesday night on a 7-4 party-line vote after nearly seven hours of fierce debate from opponents and impassioned pleas from supporters. The fate of the bill now rests in the hands of moderate lawmakers who want sponsors to make more inroads with opponents.

Colorado Democrats introduced a bill on Thursday to set up a variation of a public health insurance plan.

The long-awaited bill already has drawn strong opposition from hospitals and conservatives, foreshadowing coming clashes as lawmakers near the halfway point of the session.

Supporters and critics of a “public option” for health insurance long have been debating the pros and cons of the policy, both in Colorado and at the national level. But Democrats, who control the state legislature and the governor’s office, are pushing ahead this year in an effort they argue will lower Colorado’s health care costs, which are some of the highest in the nation, according to a state analysis. Hospital prices soared by more than 73% between 2009 and 2018, that analysis found, and the “Colorado Affordable Healthcare Option” aims to address that.

The long-awaited Colorado bill to create a variation of a public health insurance option — an effort that has garnered national attention and the ire of hospitals — was introduced Thursday afternoon, just before the midway point of the legislative session.

Although Democrats are preparing for a contentious fight about the proposal they’re calling the Colorado Option, they say they believe they can pass it.

The bill would provide Coloradans who purchase insurance on the individual market another choice by the state through private insurance. It targets counties that only have one option, aiming to create competition and lower premiums. Hospitals would be required to participate, and it would begin by Jan. 1, 2022.

The public option, if it can pass the Democratic-led General Assembly, would create a public-private partnership in which existing insurers issue the policy, while government would regulate the prices and require hospitals to accept the coverage.

The legislation would directly impact only about 8% of the state's insurance marketplace, which represents those who buy policies on the individual market and not through a group or employer.

After months of debate, numerous reports and an opposition advertising campaign, Colorado lawmakers on Thursday officially introduced the bill that would create a public health insurance option in the state.

Many of the details remain the same from earlier proposals — the option plans would be available at first only to people who buy coverage on their own; the state would set hospital prices for people covered by the public option; insurance companies that already sell plans in the individual market would be required to also offer the public option.

A study last year found that it currently charges privately insured patients on average only slightly more than the rate that Medicare pays for the same services, giving Lincoln Community the third-lowest prices of any hospital in the state. It is also community-owned and a specially designated “critical-access hospital,” a title bestowed on small, remote hospitals that provide vital services to rural areas.

All of those things should work to its advantage when lawmakers on Thursday finally introduce the much-awaited bill to create a public health insurance option in Colorado. The proposal comes with a government-dictated formula setting out the prices hospitals can charge to people covered by the public option.

A press conference is scheduled at the state Capitol Thursday to roll out a bill creating Colorado's public option insurance plan, potentially the most controversial legislation of the session and the biggest strike on high health care costs delivered by Gov. Jared Polis.

The Colorado Health Insurance Option formula's base rate is 155% of Medicare rates, but hospitals' individual rates would vary based on hospital type, payer mix and how efficiently they deliver care. Colorado hospitals could cover the costs of providing care at 143% of Medicare rates, according to a state analysis of 2018 Medicare payment data collected by the Colorado Hospital Association and the Colorado Healthcare Affordability Sustainability Enterprise board from the state's hospitals.

Colorado Gov. Jared Polis’s office released a plan Monday to limit how much the “state option” for insurance would pay hospitals, with a goal of reducing consumers’ monthly costs by up to 20%.

The formula is almost certain to run into stiff opposition from the Colorado Hospital Association. But lawmakers say the rates are better than what some hospitals are currently receiving and the rate-setting will provide more certainty about how much hospitals can expect to be reimbursed for services.