Colorado Imposes New Mandate on State’s Insurers

Published July 1, 2008

Colorado Gov. Bill Ritter (D) has signed into law a bill requiring insurance companies to develop low-cost health insurance plans and submit them to a state oversight body.

The program, called “Centennial Care Choices,” also creates a legislative panel charged with determining how to make the low-cost plans available to as many people as possible.

The bill is intended to help Coloradans who earn too much to receive Medicaid but aren’t covered by private insurance. Experts are criticizing the move as another inefficient attempt by government to interfere further in the already over-regulated health care market.

Evaded Tax Increase Vote

Reps. Tom Massey (R-Poncha Springs) and Anne McGihon (D-Denver), House sponsors of the bill, acknowledged the law was an attempt to implement a new health care program without putting the decision to a popular vote, as is required for any tax increases in the state.

Without the ability unilaterally to raise taxes, said Massey, “We don’t have the revenue to [provide universal health coverage] through public programs. So, Senate Bill 217 is an issue to try to find ways for private sectors and insurance companies to try to find bases to provide insurance to people at a more affordable level.”

“We wanted to keep the health care discussion going and had some resistance from a number of folks about being able to put something on the ballot,” said McGihon, “so [we passed] SB 217 [to] keep a conversation about comprehensive health care going.”

Eliminated from the bill in committee were an individual mandate that would have required all Coloradans to obtain insurance coverage and a request that citizens of the state approve a ballot measure that would have raised taxes in order to fund the program.

Increases Government Control

Analysts criticized the bill, signed into law June 3, as another example of unnecessary government interference in the health insurance market.

“Efforts to stem the rising costs of care and coverage are both necessary and praiseworthy,” said Jeff Emanuel, research fellow for health care policy at The Heartland Institute and managing editor of Health Care News.

“However, demanding that insurers submit their proposed coverage plans for review is an example of government interference in the marketplace that will further degrade individual choice and will have a negative impact on the insurance market as a whole,” Emanuel added.

Bringing up health care was more controversial than expected, Massey said, since many legislators “felt this would do damage to the existing private payer markets.”

Ignores Consumer-Driven Trend

Some experts have questioned the timing of Colorado’s push for universal coverage, especially given the state’s current market trend toward privately held health savings accounts (HSAs).

Fifteen percent of Colorado employers offered HSAs in 2007, and 23 percent considered offering one, according to a survey conducted by the Mountain States Employers Council in February. (See “Employer Interest in Health Savings Accounts Is Growing in Colorado,” Health Care News, May 2008.)

Nonetheless, McGihon says Centennial Care Choices will result in “rapid improvement” in health care plans, even though the program lacks the freedom of consumer-directed plans such as HSAs.

“Some of us have worked very hard for this conversation, and it would be incredibly distressing to think it would end this year without having done that,” McGihon said. She added she hopes SB 217’s provisions will help prevent “a fiasco like in Massachusetts,” where the state’s government-mandated health coverage program is expected to cost $618 million in the current fiscal year, ending June 30, alone.

“Seeking to avoid another situation like that in Massachusetts is a laudable goal,” said Emanuel. “Even more laudable, though, would be a move by the government of Colorado to begin a ‘conversation’ on how best to remove government from the health care equation and free up consumers to control their own coverage to the greatest degree possible.”

Krystle Russin ([email protected]) writes from Texas.

For more information …

Senate Bill 217, “Centennial Care Choices”: