Colorado Democrats this week will offer a sweeping amendment that seeks to dramatically rewrite their bill to decrease health care costs after weeks of negotiations with hospitals, pharmaceutical companies and private insurers that stalled the legislation’s progress at the Capitol.
If the amendment passes, some of the most powerful health care industry groups that have opposed the measure, House Bill 1232, will take a neutral stance on the legislation. Proponents say it will still drive down costs, just through a different mechanism.
Among the major proposed changes to the measure is a move away from a state-run, public health insurance option in favor of requiring private insurers to offer a highly regulated, standardized plan. Lawmakers pursued a similar policy last year, but it was scrapped in part because of the coronavirus pandemic.
Instead of requiring 20% premium reductions over two years, the amendment released Monday calls for an 18% reduction over three years.
The original version of the bill, as introduced, would have required health care providers to accept the public option plan or potentially lose their license.
Under the proposed amendment, providers won’t be required to accept the standardized private plans as long as “network adequacy” is met — meaning a provider network must be culturally responsive and reflect the diversity of consumers to the “greatest extent possible.”
Providers would, however, be required to accept the standardized plan if their opting out is the reason a carrier can’t meet premium reductions.
The measure’s rewrite comes after weeks of protracted negotiations between the Democratic sponsors of the legislation and health care industry groups. Many of those groups — including the Colorado Hospital Association, Association of Health Plans, Rural Health Alliance, Service Employees International Union of Colorado and Academy of Family Physicians — will take a neutral stance on the bill if the amendment is adopted, as expected, at a House Health and Insurance Committee meeting Tuesday.
State Rep. Dylan Roberts, an Avon Democrat who is leading the charge for House Bill 1232, said the amendment is the result of an “agreement” reached with the health care industry.
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“The introduced version of the bill was a starting point,” Roberts said, adding there was “always a possibility we would end up here.”
The Colorado Hospital Association says it will remain neutral on the bill as long as more changes affecting hospitals aren’t made.
“The affordability improvements intended by this bill are dependent on the sacrifice and management of Colorado’s hospitals,” Chris Tholen president and CEO of the Colorado Hospital Association, said in a written statement.” These are the very same hospitals who supported Colorado at every turn during the COVID-19 pandemic. They were and continue to be there for their communities. It is critical that we carefully implement this legislation and monitor it to be sure that hospitals can continue to be vital resources for their communities.”
The adoption of the amendment will likely make it easier for the measure to pass, though Republicans, who are in the statehouse minority, are expected to remain opposed to the bill.
Groups backing the proposal celebrated the news.
“Coloradans just won big,” Jake Williams, executive director of Healthier Colorado, said in a written statement. “With this new compromise, Colorado is leading the nation in addressing the underlying costs of health care and we didn’t give up what we set out to accomplish in doing so.”
The proposed changes to the measure were hastily adopted over the weekend after being hashed out in recent weeks. The bill’s prime sponsors weren’t sure as of Friday morning if the legislation would proceed as it was introduced or be rewritten to pursue a path with a state-regulated insurance plan.
Robert said he is OK with the changes because it attacks the same problem with a different tool.
“It still achieves really quality results and gets at the problem we were trying to solve anyway but also may lessen some of the hyperbolic opposition that we’ve been seeing over the last couple months,” he told The Colorado Sun on Friday.
House Bill 1232 is a major priority for Gov. Jared Polis and Democrats in the General Assembly, who have been trying for three years to pass a major bill reducing health care costs across the state. If Colorado is successful, its policy — which requires federal approval and funding — could be replicated in other states.
Opponents of the bill have spent more than $1 million on television advertising against the measure. They have also purchased digital ads in opposition and sent out mailers.
The new version of the bill would give insurance carriers three years to negotiate rates with providers to meet the 18% reduction target. For carriers that can’t lower premiums on their own, the state Division of Insurance will hold a rate hearing. “We hope that most will never get to a rate hearing,” said Roberts.
The are hearing could be followed by an enforcement action if carriers aren’t able to adequately explain why they couldn’t cut costs.
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The standardized plan would require certain benefits and deductible levels and be regulated by Colorado’s insurance commissioner, who is appointed by the governor. Insurers would have to offer the plan in every county they have operations in.
The proposed amendment to House Bill 1232 also would include the following changes:
- Add protections of reimbursement rates for critical access, independent and rural hospitals
- Create a statewide health insurance consumer ombudsman
- Enact a public hearing process to address cost savings targets and “network adequacy” problems
- Establish a formula to set a reimbursement rate floor that is no lower than 165% of Medicare’s rates for any specific hospital, and no lower than 135% of Medicare’s rates for providers
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