New report finds that public health care option may hurt Colorado economy
A new report from the REMI Partnership finds that a public-insurance option may cost thousands of Colorado health care workers their jobs and harm the state’s economy.
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REMI is a partnership of public and private organizations that work to provide Colorado lawmakers, policymakers, business leaders, and citizens, with greater insight into the economic impact of public policy decisions that face the state and surrounding regions. The partnership includes the Colorado Association of REALTORS®, the Colorado Bankers Association, Colorado Concern, Common Sense Policy Roundtable, and Denver South Economic Development Partnership,
The legislature passed HB 1004 two weeks before the end of session. The bill tasks the Polis Administration with developing and implementing a state public option:
“…requires the department of health care policy and financing and the division of insurance in the department of regulatory agencies (departments) to develop and submit a proposal (proposal) to certain committees of the general assembly concerning the design, costs, benefits, and implementation of a state option for health care coverage.”
The Remi report looks at the potential effects of a state option on providers, insurers, markets, and the Colorado economy, according to the study. The report uses two possible scenarios based on the bill text, economic analysis, and similar legislation in other states.
- Scenario 1: A statewide state option with premiums set 24% below market rates
- Scenario 2: A statewide state option with premiums set 42% below market rates
REMI estimates that the state’s individual health insurance market could lose 80% to 100% of its membership and 1,500 to 4,500 health care workers in Colorado could lose their jobs. This would exacerbate the shortage of health care workers that already exist in the state.
The report also finds that government price controls will be needed in order to save the economy:
“Government price controls that are needed to facilitate below-market premiums offered by a state option likely do not cover the full costs of care, and therefore the reduced reimbursements to health care providers could range from $494 million up to $1.4 billion.”
A public option may also impact employer-sponsored insurance costs. The report estimates that health care costs for individual businesses may increase by nearly 5%. The economy could lose $320 million to $919 million in total GDP as well.