Colorado Unveils Public Health Insurance Option

The state of Colorado is the second state in the country to offer its own health insurance option, requiring the participation of hospitals and insurers.

A new law requires the Division of Insurance and Department of Health Care Policy and Financing to formulate a public health option for Colorado residents. The coverage will be administered by private insurance companies, minding the cost of the medical expenses.

Public Health Insurance Option
Image from Consumer Direct Care Network

According to the proposal, the average monthly premiums for the public health insurance will be 9 to 18 percent lower compared to commercial plans in the market. The program is set to debut in 2022, as approved by the state legislators.

The proposal is a 196-page draft, released on Monday, Oct. 7, 2019. The highlight of this proposal is that insurers will create a plan, rather than using a government platform, such as the existing Medicaid. The new program will be called ‘State Option’ and will be available for Colorado residents who purchase their own insurance.

In addition, the state will create a reimbursement fee schedule, setting the rates to how much hospitals can receive in return for treating individuals on State Option.

Department of Health Care Policy Kim Bimestefer is optimistic about the new plan, saying, “Folks will be pleasantly surprised by what we have put together.”

Price Control

Because the state legislators are mandating hospitals and insurance providers to formulate a plan, it will ensure that there is price control to avoid costing Colorado residents more. Under the State Option plan, the rates will be between 175% to 225% of what Medicaid charges for medical services.

According to the proposal, the plan would also provide pre-deductible coverage for some services. This amount will be paid by the insurance company toward the health care costs.

The city of Colorado has a population of 5 million and about 6.5 percent does not have access to health insurance.