Summary of Colorado’s Public Option Law
In May 2019, Colorado enacted a public option law (House Bill 19-1004) requiring Governor Jared Polis’s administration to develop a proposal for a state option for more affordable, high-value coverage. Unlike Washington state’s public option law, which details the roles of the state government and private health insurers and sets a cap on provider reimbursement rates, HB 19-1004 delineates a roadmap and policy considerations to inform the administration’s development of Colorado’s public option program. Notably, the law does not set a deadline for implementation of the public option.
Whether HB 19-1004, on its own, authorized a public option program has been the subject of some debate among stakeholders in the state. At this point, however, the relevant state agencies have made clear they intend to pursue new legislative authority to implement their recommended approach in the 2020 legislative session.
Proposal Roadmap
HB 19-1004 requires the Department of Health Care Policy and Financing (HCPF), which administers Medicaid and other programs in the state, and the Division of Insurance (DOI) within the Department of Regulatory Agencies (DORA), which regulates private health insurers, to craft and submit a proposal to the Colorado General Assembly by November 15, 2019. HCPF and DOI are also required to present a summary of the proposal to the General Assembly before the start of the 2020 legislative session on January 8, 2020.
Under the law, the public option plan must: (1) leverage existing state health care infrastructure; (2) increase competition among private health insurers; and (3) improve access to high-quality, affordable health care. The proposal will be assessed according to its likelihood to meet these objectives, as well as its affordability to consumers, administrative and financial burden to the state, and ease of implementation.
In developing the proposal, HCPF and DOI are instructed to:
Consider potential impacts on consumer costs, provider participation, insurer market stability, and other factors (see Table 1 for more details);
Consult with the Colorado Health Benefit Exchange and collect feedback from stakeholders (public and private health insurance experts, consumers, consumer advocates, employers, providers, and insurers); and
Identify statutory or rule changes necessary to implement the proposed state option.
After submitting and presenting the proposal, HCPF and DOI may apply for federal waivers or submit state plan amendments in order to fund and implement the proposed state option. For state fiscal years 2018-19 and 2019-20, the bill allocates a total of $225,000 to HCPF and $346,500 to DOI to conduct research, convene stakeholder meetings, and perform other activities necessary to develop the proposed state option.
