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Coronavirus Scuttles Public Option in Colorado in ‘Cruel Irony’

May 5, 2020, 9:27 PM

Sponsors of a lightning-rod public option bill in Colorado are scuttling the insurance measure this year because of the coronavirus pandemic and the economic upheaval it’s wreaking in the state.

It’s not feasible for health-care policy stakeholders to come to the table and negotiate on a proposal they are staunchly opposed to at a time when they are responding to the Covid-19 public health crisis, Sen. Kerry Donovan (D), one of the co-sponsors of the measure, said in a phone interview Tuesday.

Shelving the bill, introduced before the virus prompted the 2020 General Assembly to pause its session, will allow all the relevant stakeholders—including the Colorado Hospital Association and health-care systems in the state—to be more involved in the process, she said.

“This was not an easy decision,” Donovan said. “This is such an important piece of legislation for a number of reasons and would address a problem I hear from my constituents frequently. There’s a lack of consumer choice, and this is a bill that’s trying to solve that problem. But we need to do it very well, and the people who would help us do it well are focused on keeping people in our community safe right now.”

The bill passed its first committee hearing the same week as the first cases of the coronavirus were confirmed in Colorado mountain communities, she said.

Plans Provide Alternatives

State public option plans take different forms but typically are advanced by the government to provide a health insurance alternative in the marketplace that is less costly than commercial plans, Trish Riley, executive director of the National Academy for State Health Policy, said in a phone interview. They save money generally by reimbursing providers a bit less than commercial plans, she said.

The Colorado plan would require health insurance carriers to offer the public option in every county where they offer individual health plans and mandate that hospitals participate. Many hospitals and health-care systems argued the cost of compliance would drive them out of business.

Additionally, the bill would have cost the state more than $800,000 to implement in fiscal year 2020-21. State budget writers are dealing with an estimated $3 billion shortfall.

Hospitals Grateful

The Colorado Hospital Association thanked lawmakers for withdrawing the bill.

The association said it looks forward to working with the Legislature next year on solutions “that do not adversely impact Colorado hospitals.”

A spokesman for Gov. Jared Polis (D), who supports the public option, said the governor is focused on keeping people as safe as possible during the Covid-19 pandemic and knows it is “a matter of when, not if, Coloradans finally get more choices for healthcare.”

Cruel Irony Seen

It’s a “cruel irony” that the pandemic forced withdrawal of the bill as people lose health insurance along with their jobs, said Adam Fox, director of strategic engagement at the Colorado Consumer Health Initiative.

The bill was the target of business groups and out-of-state political action committees, which spent hundreds of thousands of dollars on television and direct-mail advertising to defeat the measure.

Fox anticipates the opposition to the bill next year will be as stiff or worse.

“That’s not going to change in 2021,” which is likely to be a tough year economically, he said.

To contact the reporter on this story: Tripp Baltz in Denver at abaltz@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Andrew Childers at achilders@bloomberglaw.com

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