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Gov. Jared Polis signs House Bill 1232, a measure aimed at forcing health insurance companies to cut costs, on June 16, 2021. Polis was joined by Democratic legislators and supporters of the bill, including (left to right) Lt. Governor Dianne Primavera, Rep. Dylan Roberts, Sen. Kerry Donovan, Rep. Iman Jodeh and Speaker of the House Alec Garnett. (Thy Vo for The Colorado Sun)

Some private insurance companies operating in Colorado will soon be required to offer a state-regulated health insurance plan that eventually will be 15% cheaper than current rates under a bill signed into law Wednesday by Gov. Jared Polis.

In addition to House Bill 1232, the health insurance measure, Polis also signed into law legislation creating a state board that will have the authority to cap the price of prescription drugs that the panel determines are too expensive. 

The two health care measures have been longtime priorities for Polis and Democratic state lawmakers. The health insurance option bill alone has been three years in the making. 

Republican state lawmakers were staunchly opposed to both bills, objecting to the implementation of new regulations on the private insurance industry. Both measures passed without any GOP votes.

“These are more than nibbling around the margins of saving people money on health care,” said Polis at a bill signing ceremony Wednesday. “We are going to give Coloradans more choice on health care.”

Under House Bill 1232, which applies only to the individual and small group markets, private insurance companies will be required to offer the state-regulated plan in 2023 at a cost reduction of at least 5%. The total reduction must meet 15% starting in 2025. The bill does not apply to the large group and self-insured markets, where many workers at large companies get their insurance.

“Today is a momentous day not only in the history of Colorado, but in the advancement of progressive health care,” said Sen. Kerry Donovan, a Vail Democrat and prime sponsor of the measure.

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

The first version of the measure introduced at the Capitol this year was far more sweeping, requiring the health care industry to cut costs by 20% or else accept and compete with a state-offered health insurance plan, or “public option.”

Opposition to the measure, which was amended 21 times, drove record spending on lobbying by the health care industry. 

“We knew we were going up against the most well-funded opposition and I think this is going to go down as the most lobbied-against bill in Colorado history,” said Rep. Dylan Roberts, an Avon Democrat and prime sponsor of the legislation. “But we always knew that patient stories and the reason we were doing it was going to win the day.”

The other bill signed Wednesday, Senate Bill 175, creates a five-member Prescription Drug Affordability Board, whose members are appointed by the governor and confirmed by the state Senate. The board will have the power to determine whether a drug is affordable. If a medication is determined to be too costly, the board will have the authority to set maximum prices that can be charged in Colorado. 

“Not a day went by in my career as a pharmacist where we didn’t have patients coming in to the pharmacy who could not pay for their prescription drugs,” said Sen. Sonya Jaquez Lewis, a Boulder County Democrat and prime sponsor of the legislation. “Now Colorado will be the first state in the country to have both, as I call it, the carrot and the stick.” 

The board will also be tasked with making policy recommendations to state lawmakers on how to make prescription drugs more affordable.

A number of other states have passed laws in recent years to regulate prescription drug costs, according to the National Conference of State Legislatures. The state of Maryland created a Prescription Drug Affordability Board with the goal of capping drug prices in 2019 and passed legislation earlier this year to fund the board.

Thy Vo is a freelance journalist and former Colorado Sun staff member.

Twitter: @thyanhvo