Jim Smallwood

When I ran for Colorado General Assembly in 2016, I promised to work to make sure that every Coloradan had access to high quality, accessible and affordable health care. I serve Colorado’s 4th district, which covers eastern and southern Douglas County. Since being in office, a common concern I hear time and time again from my constituents is that health insurance premiums are skyrocketing.

Our health care system is far from perfect, and I know that there is a lot of work to do to fix what’s broken. I fight every day in the halls of the State Capitol for sound public policies that will give Colorado patients more choice and control over their health care. As a business owner, I know that competition empowers consumers and drives down costs. I am and always will be a strong advocate for policies that spur the free market.

But some politicians in Colorado are set on dismantling our current health care system and replacing it with a one-size-fits-all government-controlled system. Last year, we took one step closer to that reality when Governor Polis signed the Colorado Option into law. Sponsors of the bill promised Coloradans that the Colorado Option was the solution to lowering health care costs, but so far, this promise is not being kept at all.

HB21-1232, the bill that created the Colorado Option, began in 2021 as a true public option. The original bill would have turned the state of Colorado into a health insurance carrier that would compete against private insurance companies. But the key language in the bill is that this government-controlled health insurance company would be the only one in the marketplace able to dictate reimbursement rates to doctors and hospitals. Not only would doctors and hospitals be forced to offer the state’s health insurance plan, but also the fee structure. If they didn’t comply, they could lose their licenses.

There was strong opposition from doctors, hospitals, business owners and many others. Doctors warned that the public option would make Colorado a less attractive state to work in, which would lead to a worsening physician shortage by driving them out of the state. Hospital administrators spoke out against hospitals being unfairly forced to bear most of the cost of the bill. Business leaders cautioned that it would lead to decreased competition and choice. Leaders in our communities of color expressed concern about how the bill would hurt the people who needed help the most.

The message from the opposition was clear: HB21-1232 in its original form would leave Coloradans with reduced access to the health care they needed while doing nothing to make it more affordable.

Thankfully, the pushback from citizens along with the medical and business communities was persuasive, and the bill’s sponsors decided to make significant amendments. The bill was rushed through the legislative process, and in the end, the legislation that was signed into law ended up being a rate-setting mandate. Health insurance companies would have to lower their rates by five percent in the first year, 10 percent in the second year and 15 percent in the third year.

But as it turns out, these state-designed mandated rate decreases created unreachable goals. The Colorado Division of Insurance (DOI) last month released its rates for 2023, and lo and behold, health insurance rates have not gone down — they’ve actually gone up. As the Denver Gazette reported, “Colorado’s insurance premiums in fact will rise by over 10 percent next year in the small group health insurance market. Premiums will go up more than seven percent for individual health plans.”

In the first year of its implementation, this government-controlled experiment is clearly not living up to its promises of significant savings.

The reality is that for most Coloradans, the Colorado Option plans are more expensive than the traditional, non-Colorado Option plans. In fact, 60 percent of Coloradans will have plan choices that are less expensive than the Colorado Option. What’s more, even in the few areas where the Colorado Option plan is the lowest cost plan, the savings are minimal — a mere 10 to 48 cents per month at best. This is hardly the discount that backers of the Colorado Option claimed the system would deliver.

Record-high inflation is driving up costs across the board, as Coloradans are now paying 7.7% more for goods and services than a year ago. According to a report from the Common Sense Institute (CSI), the average Colorado household has spent $9,207 more on food, housing, transportation and medical care since 2020. Coloradans cannot afford higher health care costs, yet this is the reality they now face under the Colorado Option.

But perhaps the most alarming part is that four prominent health insurance companies have announced in recent weeks that they are partially or completely exiting the Colorado market this year. Then in another blow, Peak Health Alliance, which serves Summit, Grand and La Plata, also announced that they will not be offering coverage in 2023 because of these departures.

These exits are significant because there are simply not that many health insurance companies in the state to begin with. Depending on where residents live, there is anywhere from two to six health insurance options available to choose from. With the exit of these carriers, there are fewer choices for care. Thousands of Colorado patients will now have to find a new carrier and possibly new doctors.

Coloradans should be concerned if this trend continues. As we get fewer health insurance companies and rates continue to go up, we may be faced with the reality of creating a single payer system – a proposal that is already extremely unpopular with Coloradans. In 2016, Colorado voters overwhelmingly rejected Amendment 69, the Colorado Creation of ColoradoCare System Initiative. Amendment 69 would have made private health insurance carriers obsolete and replaced them with a single government-controlled, taxpayer-funded health care system. Nearly 80 percent of Coloradans voted no, including many Democrats and progressives.

The resounding rejection of Amendment 69 six years ago dovetails into what we witnessed earlier this month. In the aftermath of the midterm elections, a theme has emerged: extremism on both sides is unpopular. Extreme Republican candidates and progressive Democrat candidates underperformed this year. One news report cited a National Election Pool (NEP) exit poll that found that 51% of respondents said Democrats are too extreme, while 52% said the Republicans are too extreme. Progressive policies, such as a government takeover of our health care system, are simply not appealing to the majority of voters.

We already know where the Colorado Option is likely to end up – all we have to do is look at Washington state. Washington is the only state in the country that has fully implemented a public option, and the data shows that it’s been a complete disaster. An abysmal 1% of the state’s exchange consumers enrolled in the state’s public option plans last year, and premiums were 11 percent higher than the lowest marketplace plans. Washington state is hardly a system to model, but if Colorado moves forward with this one-size-fits-all system, we could soon be the latest example of this flawed, unproven policy.

I believe the only reason there would be any measurable enrollment in the Colorado Option plans would be if the state government moves forward with a plan to lure individuals into these plans by inaccurately “mapping” them as the most satisfactory match to their existing plans during open enrollment on Colorado’s Official Health Insurance Marketplace. A quick glance at the homepage of their website demonstrates to me a clear bias towards trying to artificially boost enrollment in only these Colorado Option choices.

The rate decreases that were mandated under HB21-1232 are unreasonable and frankly impossible for health insurance carriers to meet. When the government tells health insurance carriers what to do, there are serious consequences – and it didn’t take long for those consequences to come to fruition. Carriers are fleeing the state because it’s too expensive to do business here, and the only people who suffer are Colorado patients.

While there are improvements to be made, there are components in our current system that are helping more Coloradans gain access to affordable health care. The state’s health insurance exchange saw nearly 200,000 enrollees during our last open enrollment period. And thanks to the Affordable Care Act (ACA) subsidies that were given through the American Rescue Plan Act (ARPA) during the pandemic, 150,000 enrollees have seen their premiums lowered by an average of $900 per year.

The Colorado Option is doing the opposite of what proponents promised it would do, which is exactly what many of us predicted. I will continue to work with my colleagues in Denver to craft real solutions that will address the root cause of rising health care costs and expand access to affordable care. Let’s work together to build on our successes instead of starting over with a system that is already failing Coloradans. We cannot let the government to control our health care system.

Jim Smallwood, a Republican, represents Douglas County’s Senate District 4 in the Colorado General Assembly. He is a member of the Senate Health and Human Services Committee.