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Colorado Democrats’ big health insurance bill was amended 21 times. Here’s how it has changed.

What started as a plan for a state-offered health insurance option to drop costs by 20% has now morphed into a measure requiring private companies to offer a state-regulated plan with 15% lower costs.

Republicans listen to debate in the Colorado Senate on Thursday, May 20, 2021. (Jesse Paul, The Colorado Sun)
  • Credibility:

It was a public option bill, and then it wasn’t. It required the health care industry to cut costs by 20% at one point, but now that figure has been slashed by a quarter. For weeks, the legislation threatened doctors with fines and licensing consequences if they didn’t participate in the initiative, but now physicians can’t be penalized. 

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As House Bill 1232, Colorado Democrats’ sweeping measure to try to drive down health care costs, advanced through the Capitol, it went through a 21-amendment metamorphosis.

“It’s been changed four times when it came from the House to the Senate,” complained Sen. Joann Ginal, a Fort Collins Democrat who is skeptical of the bill. “But even more in the House.”

The changes — some of which have been sweeping — have been added to win over industry groups and shore up lawmakers’ votes, as well as to make technical tweaks.  

Some say the policy, which is now a single vote away from heading to Gov. Jared Polis’ desk, has transformed from a lumbering caterpillar into a fluttering butterfly. Others think the end result is something more akin to an annoying miller moth. 

“It could have been a whole lot worse,” quipped Sen. Jim Smallwood, a Centennial Republican who adamantly opposes the policy but has thanked Democrats for being open to amendments. 

The Colorado Sun scanned through the changes to create a timeline of how the policy has been dramatically altered:


Public option is dropped

The House Health and Insurance Committee was where House Bill 1232 changed most dramatically.

The introduced version called for a two-phase plan that would have required the health care industry to drive down costs by 20% by 2024 or trigger the state to form a nonprofit to offer a public health insurance plan that would be at least 20% cheaper in each county than the average premium rates offered by private insurers. Both of these applied only to the individual and small group markets, the places where people who don’t have employer help in buying insurance and small companies shop for coverage.

The original version of the measure also would have given the state power to set a fee schedule for the public option plan that providers were required to abide by. If they didn’t, doctors and hospitals could potentially lose their licenses. 

However, the meat of the proposal was scrapped during its first committee hearing in what’s referred to as a “strike below” amendment. With the amendment, the sponsors of the bill moved to make it more about regulating private insurance than about getting government into the business of selling health coverage.

The new version required the state commissioner of insurance to design a standard health insurance plan — dictating things like what benefits are covered and what consumers can get without having to pay toward their deductibles. Insurance companies would be required to offer the standard plan in counties where they already sold other plans in the individual or small group markets. And they would be required to sell the standard plans by 2025 at rates 18% below 2021 rates.

A sign outside Saint Joseph Hospital in Denver, photographed on Oct. 22, 2019. (John Ingold, The Colorado Sun)

The new version still gave the state the ability to set prices for hospitals and doctors. Doctors who didn’t participate could be fined, and hospitals that didn’t participate could have their licenses revoked.

“The introduced version of the bill was a starting point,” state Rep. Dylan Roberts, an Avon Democrat and prime sponsor of the measure, said at the time. He added that there was “always a possibility we would end up here.”

Startup costs get added in

In the House Appropriations Committee, the costs of the measure were set. 

The measure would spend $1.5 million, including $1.2 million allocated to the Division of Insurance to get the policy off the ground. The remaining funds would go to the Colorado Department of Law and the Colorado Department of Health Care Policy and Financing. The state would have to hire about seven full-time employees to manage the initiative. 

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(The Senate later increased the bill’s spending by about $200,000.)

But that’s not all the measure would cost. 

Colorado’s insurance commissioner would have to seek what’s called a 1332 waiver from the federal government to implement the bill and secure more money to get it up and running. In fact, the entire bill is contingent upon the Biden administration granting the waiver. 

Changes on House floor

The House debated 28 amendments to the bill, but only eight passed. Several of those cleaned up small bits of language, and the rest made only minor tweaks.

One amendment instructs the commissioner of insurance to write rules that make sure that companies looking to offer the standard plan in a county where they haven’t previously offered coverage are not at a competitive disadvantage.

Another allows insurance companies, hospitals and doctors to appeal decisions of the insurance commissioner related to price setting to state district court. Another deals with how to set hospital prices for “a pediatric speciality hospital with a level one trauma center,” a designation that refers to Children’s Hospital Colorado.

Changes in Senate committee

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Another 14 proposed amendments were brought in the Senate Health and Human Services Committee. Only four made it into the bill. Several of those — including one related to fines that could be charged to doctors who won’t accept the standard plan and another on reports that the state needs to commission — were subsequently overwritten on the Senate floor.

What survived out of the committee’s changes were a couple of language clarifications and a typo fix.

No more penalties for doctors

The biggest change to the bill made on the Senate floor was to remove penalties for doctors who refuse to accept the standardized plan. The measure was also altered to allow hospitals’ licenses to be suspended for not participating in the initiative, but not fully revoked as earlier versions of the legislation called for. 

The amendment helped to assuage the anxieties of some Senate Democrats who felt the punitive parts of the measure were a bridge too far.

Sen. Rhonda Fields, an Aurora Democrat, said during a committee hearing that she didn’t “like the tone” of the bill. “I think that sends the wrong message when I think about the social and emotional support that I think our health care providers and our doctors and nurses need right now,” she said.

A room in the Denver Health emergency department where patients are treated on-demand for their opioid dependency. ” The difference this makes for the patient is literally lifesaving,” said Dr. Scott Simpson, a psychiatric emergency medicine doctor at the hospital. (Jesse Paul, The Colorado Sun)

The change helped win Field’s support. But it also angered private insurers, who said the alteration was untenable — making it more difficult for insurers to lower prices while still meeting requirements that they contract with an adequate network of doctors. As a result, the Colorado Association of Health Plans moved to an “oppose” position on the bill. 

The state’s insurance commissioner will, however, still be tasked with monitoring how many providers accept the standardized plan to determine financial viability. 

Finally, another change made on the Senate floor allows the insurance commissioner to set reimbursement rates for little-used services, after consulting with hospitals, providers and the Department of Health Care Policy and Financing.

Savings mandate reduced to 15%

The final amendment made to the bill in the Senate was to reduce the cost-savings mandate in the measure to 15% — a 5 percentage point reduction from where the legislation began. 

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Sen. Kerry Donovan, a Vail Democrat and a prime sponsor of the measure in the Senate, said the change was made to ensure the bill has a reduction goal that’s “a reach, but achievable.”

“In order to set the plan up for success, we thought that it would be better to be able to really know that we can do 15% rather than fall short of a higher target,” she said.

Nineteen total amendments were offered during the Senate floor debate. Six were adopted.

Where is the bill at? 

The bill passed the Senate on Wednesday by a 19-16 vote, with Democratic Sen. Rachel Zenzinger, of Arvada, joining all of the chamber’s Republicans in opposition to the measure. 

The bill now heads back to the House, which will decide whether to accept the Senate’s changes, reject them wholesale or launch a conference committee to work out the differences. 

The legislation could clear the legislature and be sent to the governor to be signed before the end of the week. 

CORRECTION: The subhead of this story was updated at 8:20 a.m. on May 27, 2021, to correct the percent by which House Bill 1232 originally proposed reducing health insurance premiums.

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