35K enroll in Colorado's new public option health insurance program

Approximately 35,000 people enrolled in Colorado’s public option health insurance program during its first enrollment period, according to the state’s Division of Insurance.

Democratic Gov. Jared Polis said the number enrolled surpassed original estimates during this week’s State of the State address.

A state law passed in 2021 created the “Colorado Option.” It requires health insurance carriers to offer a standardized plan within individual and small-group markets at reduced prices and covers all benefits required

Late last year, the Colorado Department of Regulatory Agencies stated Coloradans could save up to $326 million on health insurance in 2023 due to the Colorado Option. The law requires premiums to be set below 2021 prices, with adjustments for inflation, by 5% this year, 10% in 2024 and 15% in 2025.

“In Washington state, their public option only had approximately 1% of total enrollment in its first year,” Colorado Insurance Commissioner Michael Conway said in a statement. “The fact that we are at 13%, far surpassed my hopes for what we would achieve in our first year. But perhaps I shouldn’t be surprised. Not only do these plans create more competition in our insurance market, they offer a better value to Coloradans, with many services that lead to better health outcomes offered at no-cost or low costs.”

Analysis by the Common Sense Institute found the mandated price reductions without a reduction in health care costs would force medical providers to “cut costs in a way that impacts quality and access or pass on costs to the remaining private insurance market through higher prices.” In October 2022, the Colorado Division of Insurance announced final rates and an average price increase of 10.4%.

Polis said health care in the state and the nation requires additional reform.

“The United States spends far more on health care than our peers around the world, and our results are no better,” Polis said during Tuesday’s State of the State. “Meanwhile, Coloradans still pay some of the highest costs for health care, particularly hospital care. Sadly, we are among the top 10 states for hospital cost, price and profit. Let’s change that. Our work to save people money on health care is more urgent than ever before, and we must leave no stone unturned.”

Brandon Arnold, associate director of the Colorado Association of Health Plans, told The Center Square in an emailed statement that "most Coloradans have agreed that a non-standard, private insurance plan is better suited for them.""Health insurance providers have tight medical loss ratios that limit the amount of premium dollars that can be spent on administrative costs and profits," he said. "In the midst of this, the administrative burden on health insurance providers has only increased as a result of increased red-tape and bureaucracy from the Division of Insurance and the Governor's office because of initiatives like the Colorado Option. More than 87% of Coloradans find better value through Colorado's health insurance providers, but efforts that could save people money on healthcare, like decreasing the regulatory burden, have been lacking."

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