On Wednesday evening, during a seven hour hearing in the House Health and Insurance Committee, the Colorado Chamber testified against House Bill 1349, the public option bill. While the measure ultimately passed on a party line vote, it was met with strong opposition from members of the business community over concerns about cost-shifting, government rate-setting, and overall uncertainties in the plan.
The bill would mandate that health insurance companies offer the public option for individual plans and would allow the state to set the rates that hospitals or providers are allowed to charge for their services under the plan.
“One of the biggest complaints we hear from our members is how the cost of health insurance continues to grow year after year and that it’s getting too expensive for them to provide these benefits,” said Senior Vice President of State and Federal Relations Loren Furman. “We appreciate the sponsors’ and administration’s efforts to try to find a solution to this problem, but we’re concerned that trying to drive down costs for one sector of the market will consequently increase premiums for group plans.”
The Colorado Chamber represents hundreds of companies that provide group insurance plans Employee Retirement Income Security (ERISA) plans in order to provide competitive benefits for their workers.
Sponsors of the bill have stated that there are provisions in the plan to prevent cost-shifting and that the Colorado Department of Insurance (DOI) can reject any proposed rates that potentially shift costs. But Furman pointed out that those provisions leave employers in limbo because if DOI rejects rates provided to them, employers will be left with less products to choose from – which could drive up rates. Further, ERISA plans are regulated by the federal government, preventing DOI from stopping cost-shifting for those plans.
“We also have grave concerns with allowing a governmental entity the authority to control prices or rates for a private sector business,” Furman said. “We would discourage this within any other industry because we believe the market should determine those rates, not state government.”
Finally, Furman pointed out the huge discretion left to DOI to clarify and resolve the details of the bill. She encouraged lawmakers to take a step back and worth through those issues in the legislative process.