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What the heck is going on with Colorado Democrats’ public health insurance option bill?

House Bill 1232, a top priority of Gov. Jared Polis, has been the subject of weeks of still-unresolved negotiations between lawmakers, hospitals and others in the health care industry

Gov. Jared Polis arrives to deliver his State of the State address in front of the House of Representatives at the Colorado Capitol Building on Wednesday, February 17, 2021. (Pool photo by AAron Ontiveroz/The Denver Post)
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Democratic state lawmakers aiming to drive down health care costs are planning to move forward this week with legislation to potentially create a public health insurance option after roughly a month of still-unresolved negotiations with hospitals, doctors and others in the medical sector. 

But they’re still not sure exactly what their policy will look like. 

Two paths forward have surfaced. The first is to continue on with the current version of House Bill 1232, which would give the health care industry a chance to bring down costs and avoid the state offering its own insurance plan. The second path is to swap the original version for legislation akin to what was pursued last year, where instead of the state offering a health insurance option private insurers would be required to offer a highly regulated, standardized plan.

“I think (either) could happen when we go to committee on Tuesday,” said state Rep. Dylan Roberts, an Avon Democrat who is leading the push for House BIll 1232.

Regardless, Roberts says, the measure will be advanced in some form after being placed in a holding pattern during its 10-hour first committee hearing on April 9. 

“We’re going forward on Tuesday. And we hope to find an agreement with some of these opposition groups before then. But, if we don’t, we’re still going to go forward on Tuesday,” he said.

The complications underscore how politically delicate it is to try to overhaul Colorado’s health care system. The recent negotiations have included assuaging the fears of labor groups, a core Democratic constituency. The groups surprisingly opposed the bill during its first hearing because they were worried workers would be fired to help hospitals balance their budgets to make up for reduced revenue following the policy change. They’ve since warmed to the legislation after being promised that changes will be made. 

State Rep. Dylan Roberts, D-Avon, speaks at a news conference about the introduction of a public health insurance option in Colorado at the state Capitol on Thursday,

Adding to the tangle is the fact that the 2021 lawmaking term is fast approaching its adjournment date. The legislature has until June 12 to complete its work, though Democratic leadership at the Capitol would like to wrap things up around Memorial Day. 

Lawmakers do have the option to pause the session and work out the details without losing any of the 120 lawmaking days they are allotted thanks to a Colorado Supreme Court ruling last year that removed the requirement they use the 120 days consecutively.

With the state budget nearly complete, the General Assembly effectively has until the end of 2021 to wrap up its work as long as a public health emergency declaration from the governor is in effect. However, that’s not the preferred route.

The Colorado Senate is likely where the legislation faces its biggest hurdle. Democrats have a majority in the upper chamber, but it’s much smaller than the party’s large advantage in the House. 

“I wouldn’t say I’m getting nervous,” said Senate Majority Leader Steve Fenberg, D-Boulder. “I’m watching it and interested in seeing what the end product will be that comes to the Senate. I think everybody knew this bill was going to change from where it was when it was introduced. That’s not a big surprise.”

Reimbursement rates are the big sticking point

Recently, the sticking point in the negotiations has been with hospitals, with whom Democrats have explored moving forward by reverting to last year’s proposal.

“The biggest hangup is around the reimbursement piece,” said Joshua Ewing, vice president of legislative affairs for the Colorado Hospital Association.

Lawmakers would like to see a floor 150% above Medicare reimbursement rates. Hospitals want the floor to be 200%.

Ewing said hospitals understand that they will take a revenue hit from House Bill 1232, but they want it to be fair in comparison to others in the health care industry, like pharmaceutical companies and private insurers. 

The emergency room entrance to Saint Joseph Hospital in Denver, photographed on Oct. 22, 2019. (John Ingold, The Colorado Sun)

“What we’re talking about is cuts to hospitals,” he said. “Who is adversely impacted by those cuts? It’s not just a straightforward kind of thing. Cuts have consequences and I think all we’re asking is let’s be really thoughtful about how we’re cutting hospitals in the middle of a pandemic.”

Roberts said the other lawmakers working on the bill, which is a policy priority for Gov. Jared Polis, are committed to reaching a compromise. Democrats have been pushing for years to pass a major bill to drive down health care costs in Colorado. With next year an election year, this is the prime opportunity to get the measure done.

“We need to have the assurance from some of these larger stakeholders that they’re not going to continue to lobby against this bill even if we make these significant changes,” he said. 

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Robert said he is OK with scrapping the original language in House Bill 1232 in exchange for reverting to last year’s policy. 

“This alternative path is definitely very much on the table because for me, 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 said.

Opponents of Roberts’ bill have spent about $1 million on television ads attacking the policy. There has been untold spending on digital ads and mailers, too.

House Bill 1232 is scheduled to be debated in the House Health and Insurance Committee on Tuesday.

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