CO Public Option Bill Paused, Unemployment Rises Due To COVID-19

The Colorado House of Representatives laid aside the public option proposal, the Colorado Health Care Option, in light of coronavirus.

Three members of the Colorado House of Representatives wrote a guest column in The Denver Post explaining the decision.

“We have reached the difficult decision of withdrawing the Colorado Option from this year’s session in order to ensure that those whom the bill is meant to serve and help can be robustly involved in the process,” the representatives wrote.

House Bill 20-1349 had been years in the making. It would create a state-based, payer-run health plan available to Coloradans through the individual health insurance market. The bill empowers the commissioner to develop the rules under which the health plan operates, including requiring payers to offer the health plan in certain counties.

The representatives shared that the day of the legislation’s first hearing on March 14, 2020 was the same day that the first coronavirus cases in Colorado were confirmed.

“This was an unwelcome coincidence that saw the very people struggling to afford health care be the first ones hit by a life-threatening health care pandemic,” the column observed.

However, with the Colorado General Assembly adjourned, coronavirus demanding the provider community’s undivided attention, and public, in-person response difficult to accomplish safely, the bill had to be put on hold.

The representatives pledged to continue meeting with stakeholders in the future to discuss the legislation.

Private payers in Colorado may welcome the news that the public option is being put on hold.

The Colorado Association of Health Plans consistently decried the bill.

“As introduced, the government health insurance program would raise costs for carriers, reduce vital consumer services and risk destabilizing the market as carriers make difficult decisions about whether they can be viable in Colorado,” Amanda Massey, executive director of the Colorado Association of Health Plans, said in a press release from early March 2020.

The Colorado Health Care Option would raise fully-insured market premiums by at least $200 million, Massey said. She laid the blame for Colorado’s high healthcare prices at the feet of providers, hospitals, and pharmaceutical companies and argued that the bill gives the commissioner too much authority.

The question Colorado now faces is: with public option on hold and coronavirus still present though potentially waning, what does the public option delay mean for Coloradans’ healthcare coverage?

The tie between employment and healthcare coverage is well-documented in the US and presents a bleak outlook for Colorado. Fifty-two percent of Coloradans relied on employer-sponsored health plans for their healthcare coverage in 2018, the representatives mentioned, citing the Kaiser Family Foundation coverage tracker. That is four percent higher than the national percentage.

“Consider these numbers in the midst of a health care national emergency and it is hard to argue that our healthcare system isn’t designed to fail many of our friends and neighbors,” the representatives wrote.

In the month of March 2020, unemployment in Colorado nearly doubled from the previous month from 2.5 percent to 4.5 percent, according to the Colorado Department of Labor and Employment. This was the largest spike in unemployment since August 2015.

Already, unemployment in the more rural areas of the state has hit 50 percent, the representatives stated.

At the same time, however, researchers recently found that, with or without public option, those living in states like Colorado may have some advantages in the pandemic due to their access to Medicaid.

Residents of Colorado have the advantage of Medicaid expansion. If the national unemployment rate nears 20 percent, states that expanded Medicaid could see 25 percent uninsurance, whereas those that did not expand Medicaid could see 40 percent uninsurance, a recent Urban Institute report discovered. Meanwhile, over half of those in Medicaid expansion states would enroll in Medicaid, but only a third would do so in nonexpansion states.

“With historic levels of joblessness around the corner, millions of workers and their families are about to lose their employer coverage. Our safety net is about to be tested, and it’s going to work a lot better in states that expanded Medicaid,” said Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, in a press release which HealthPayerIntelligence received by email.

Colorado is also one of a handful of states that has opened a special enrollment period.

Researchers from the Urban Institute and experts from payer organizations such as the Alliance of Community Health Plans (ACHP) have advocated for states and payers to be allowed to open special enrollment periods. A special enrollment period would allow those who have been laid off due to coronavirus to have access to federal and state health insurance marketplaces established by the Affordable Care Act.

Like the rest of the country, the convergence of these factors still leaves many unknowns for the Centennial State.