Two Bills Seek to Address High Cost of Health Care in Rural Colorado

Two bills are in the legislative works to address the limited insurance-plan options, high insurance-plan premiums and high health-care costs for some parts of rural Colorado that have few choices.

One is a bipartisan House bill, which would start Colorado down the road to possibly providing a state-wide, health-insurance program termed a “public option.” It is scheduled to be heard Wednesday afternoon, January 23rd, when the House Health and Insurance Committee convenes for a meeting at 1:30 p.m. in the Old State Library.  The bill would establish the new program by next year if hurdles could be overcome.

The second is a Senate bill that would establish a one-year pilot program to allow some individuals in two mountain counties to (a) participate in the State’s health-care plan for its workers and to (b) belong to health-care cooperatives that would negotiate prices with providers.

House Bill

Titled “Proposal for Affordable Health Coverage Option,” HB-1004 is co-sponsored by Representatives Dylan Roberts (D-Avon) and Marc Catlin (R-Montrose).

Here’s the summary of the bill by Legislative Council staff:

The bill requires the department of health care policy and financing and the division of insurance in the department of regulatory agencies (departments) to develop and submit a proposal (proposal) to certain committees of the general assembly concerning the design, costs, benefits, and implementation of a state option for health care coverage. Additionally, the departments shall present a summary of the proposal at the annual joint hearings with the legislative committees of reference during the interim before the 2020 legislative session.

The proposal must contain a detailed analysis of a state option and must identify the most effective implementation of a state option based on affordability to consumers at different income levels, administrative and financial burden to the state, ease of implementation, and likelihood of success in meeting the objectives described in the bill. The proposal must also identify any necessary changes to state law to implement the proposal.

In developing the proposal, the departments shall engage in a stakeholder process that includes public and private health insurance experts, consumers, consumer advocates, employers, providers, and carriers. Further, the departments shall review any information relating to a pilot program operated by the state personnel director as a result of legislation that may be enacted during the 2019 legislative session.

The departments shall prepare and submit any necessary federal waivers or state plan amendments to implement the proposal, unless a bill is filed within the filing deadlines for the 2020 legislative session that substantially alters the federal authorization required for the proposal and the bill is not postponed indefinitely in the first committee.

The bill’s Fiscal Note provides further analysis and assumptions made for the Fiscal Note:

Summary of Legislation

The bill requires the Department of Health Care Policy and Financing (HCPF) and the Division of Insurance (DOI) in the Department of Regulatory Agencies to develop and submit a proposal for a state option for health care coverage that leverages existing state health care infrastructure.  The proposal must consider affordability to consumers at different income levels, the administrative and financial burden to the state, and any statutory or rule changes necessary to implement the proposed state option.  The proposal must be submitted to the General Assembly by August 31, 2019.

Among other things, in developing the proposal, HCPF and DOI must:

  • conduct actuarial research to identify potential costs to participants;
  • evaluate provider rates;
  • evaluate eligibility criteria for individuals and small businesses;
  • determine the impact on the state budget;
  • determine the impact on the stability of health care markets;
  • engage in a stakeholder process; and
  • review information from a pilot program to expand access to state employee group health insurance that may be initiated through Senate Bill 19-004.

After the proposal has been created and presented to the General Assembly, HCPF and DOI must submit any federal waivers or state plan amendments necessary to fund and implement the state option described in the proposal.  The waivers and plan amendments may be delayed by legislative action that alters the federal authorization needed.

Assumptions

The fiscal note makes the following assumptions:

  • the bill will be signed into law by May 1, 2019, necessitating a current fiscal year (FY 2018-19) appropriation;
  • one-third of costs will be incurred in the current FY 2018-19 and the remainder in FY 2019-20; and
  • HCPF and DOI will need to submit a federal waiver or state plan amendment in FY 2019-20.

Senate Bill

The Senate bill, SB-4, “Address High-cost Health Insurance Pilot Program,” is sponsored by Senator Kerry Donovan (D-Vail).  The bill has been assigned to the Senate Health and Human Services Committee, but it has not yet been calendared for a hearing.

The bill would direct the State to try to create a one-year pilot program that would accept certain individuals into the state workers’ health-care plan.  Household income of the individuals could be between 400 percent and 500 percent of the federal poverty level.  (The federal poverty level for this year is $25,100 for a family of four.)

The bill would only apply parts of Garfield and Eagle counties this year that have few health-insurance plan choices.  The bill would “modernize” state law to authorize “health-care cooperatives” that serve the “consumers” and to, among other things, negotiate rates with providers.

Here’s the summary of the introduced bill from the Legislative Council staff:

Sections 1 and 2 of the bill authorize the state personnel director to explore the feasibility of offering and, if feasible, to develop and implement a one-year pilot program in a limited geographic region of the state affected by high health insurance premiums to provide access to individuals in that region to participate in the group medical benefit plans offered to state employees. The pilot program would be available:

  • In the portions of Eagle and Garfield counties that are within the service area of the state group benefit plans;
  • To a limited number of individuals whose household income is more than 400 % but not more than 500 % of the federal poverty line; and
  • In the 2019-20 benefit plan year.

Section 2 outlines the factors for the state personnel director to consider in determining the feasibility of the pilot program.

Sections 3 through 15 modernize laws authorizing health care cooperatives in the state to incorporate consumer protections such as coverage for preexisting conditions and to encourage consumers to help control health care costs by negotiating rates on a collective basis directly with providers.

A Fiscal Note for the bill has not yet been published.

The Denver Post editorialized on January 13th about the public-option concept:

The flip-side of an ambitious agenda, however, are legitimate questions about how exactly these big-ticket solutions to burdensome problems will work in a state that has some serious financial quirks.

We support many of the Democrats’ policy goals but the devil is in the details. For example, long has this board supported a public option to create competition in the insurance market to drive down costs. And yet the thankless job of launching a government-run health insurance provider that is financially stable, affordable and effective is a daunting task indeed.

For more information on HB-1004, contact Loren Furman, Chamber Senior Vice President for State and Federal Relations, at 303.866.9642.

For news media coverage of this issue, read:

“Colorado Democrats introduce public option health care as they take control of General Assembly,” by Anna Stave, The Denver Post, January 4th.

“Two Colorado lawmakers aim to reduce health care costs by creating a public insurance option not available anywhere else,” by Nic Garcia, The Denver Post, December 28th.