Colorado lawmakers drop call for state-run health insurance plan, stick with mandate to lower premiums

Colorado lawmakers won’t try to implement a state-run health insurance plan after all, sponsors of a public option bill announced Monday afternoon.

After months of negotiating with the health care industry — for the second year in a row — Democrats said they’ve come to an agreement about how to force insurers and hospitals to reduce health care costs without making the state an insurance provider.

House Bill 21-1232 as initially written would have been a phased approach. In the first phase, the state would to set requirements for coverage under a standard plan that private insurers could offer on the Connect for Health Colorado marketplace. Insurers also would have been required to meet goals for reducing monthly premiums (20% within two years). If they didn’t, it would trigger Phase 2, where the state would step in and sell its own insurance plan.

But sponsors have agreed to drop the second phase, which state Rep. Dylan Roberts previously told The Denver Post he would entertain if the industry also made concessions and could still reduce health care costs.

The updated bill requires insurance carriers that offer the standardized-requirements plan on the individual and group markets to carry the new plan starting Jan. 1, 2023.

The cost-reduction targets have also changed: Carriers have three years (by 2025) to offer the standardized plan at a premium rate that is less than 18% of what was offered in 2021. If the insurers don’t meet the reduction goals, the state could step in and temporarily set rates to meet those reductions.

This is a developing story and will be updated.

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