House committee passes overhauled health insurance bill

The House Health and Insurance Committee on Tuesday passed an overhauled bill aimed at offering a lower-cost health insurance option for individuals and small businesses in Colorado, a day after its three sponsors announced sweeping changes intended to end major health care industry partners’ opposition to the bill.

Rep. Dylan Roberts, D-Avon, told committee members that the amended version of House Bill 1232 is “a big departure” from the original bill, introduced in March.

The amended bill — known as a “strike below” for all the struck and rewritten text under its original title — was announced Monday after weeks of negotiations with industry groups like the Colorado Hospital Association, Colorado Association of Health Plans, Service Employees International Union and Colorado Rural Health Alliance.

“We thought it was best to take a pause and talk to the stakeholders, and we’ve arrived at a position where adoption of this strike below will bring several of the major industry groups and health care interests to positions of neutral or amend, and certainly not opposed anymore,” Roberts said.

The amended bill would require insurance carriers in Colorado to create a new standardized benefit plan to offer in the individual and small group markets on the state’s health insurance exchanges, and to reduce premiums by a total of 18%, or 6% a year for three years, starting in 2023.

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The original bill also called for the creation of a new standardized benefit plan, encouraging carriers to reduce premiums 20% over two years. But rather than require those reductions, it authorized state officials to create a nonprofit, quasi-governmental authority to offer the plan as a competing Colorado public option if the industry failed to meet premium reduction goals.

“Our intent of introducing this legislation … was to lower health insurance costs for Coloradans on particular markets so that more people could get the security of health insurance. Even with the strike below, we will end up there, and I think that is a worthy thing to go forward with, even though it doesn’t represent everything we wanted in the first place,” Roberts told the Health and Insurance Committee.

The individual and small group markets account for about 15% of Colorado’s total health insurance market, according to the committee’s discussions, and members had plenty of questions about the amended bill before ultimately voting 8-5 to pass it along party lines.

The approval could put the bill before the House Appropriations Committee as soon as early next week, Roberts said.

Republicans on the Health and Insurance Committee raised numerous questions and concerns about the bill. They focused on its proposed reimbursement rates for health care providers that serve patients on the standardized plan, potential fines for providers who don’t treat patients on the plan, where cost savings for insurance premium reductions will come from, and if any cuts will fall on health care workers.

Some recommended a longer pause on the bill, given the impacts of the pandemic on the health care industry, or even questioned the need for the initiative, with heavy subsidies currently available for insurance purchases on the exchange. Another concern raised was “cost-shifting,” with lower reimbursements for more profitable hospitals and higher reimbursement rates for less profitable ones.

“The issue of whether we should go down this path or not is one that will continue to be debated throughout the legislative chambers,” said Rep. Matt Soper, of Delta, who voted against the bill.

Roberts argued the proposed 18% cuts are achievable and targeted to protect health care workers, and less than what was originally proposed, noting carriers could then adjust rates for inflation by the medical care index, generally a higher rate than allowed in the original bill. He also maintained that even with the temporary subsidies, affordable health insurance is not available in all parts of the state.

At the end of the day, the proposed bill would mean more Coloradans can afford quality health insurance coverage and get needed medical care, and reimbursement rates would ensure rural hospitals and independent critical access providers are protected, with some seeing higher reimbursements than they do under commercial health insurance plans, Roberts said.

“The agreement we reached with some of the largest parts of the health care industry does exactly what Coloradans need and what we set out to do — create a new health insurance option for consumers and save them money,” Roberts said in a news release announcing the committee’s vote. “We brought everyone to the table to put Coloradans first and deliver results. Small businesses and people across our state have told legislators time and time again that they need an affordable health care option, and soon they will have it.”

Yet at least one Democrat on the Health and Insurance Committee also expressed some lingering concerns while voting to move the bill forward.

Rep. Yadira Caraveo, of Thornton, vice chair of the Health and Insurance Committee and a physician, raised concerns about reimbursement rates and possible fines for providers. “My supportive vote today is given with the assumption that we will continue to work on this to get this right for Colorado providers who take care of our children and our youth in particular,” she said.

Roberts said he’s committed to continuing to improve the bill. “We still have more work to do on this bill and we will do that,” he said. “We’re going to continue to work with all relevant stakeholders. We want to make sure this policy works.”

Tom Lotshaw can be reached at tlotshaw@vaildaily.com.