By David Williams
The Center Square/May 11, 2021: Last week, lawmakers in the Colorado House debated the merits of the latest proposal to create a government-run public insurance option (House Bill 1232), deciding more time was needed to determine what exactly was in the proposal and ultimately delaying the vote.
Besides there being uncertainty about what exactly the lawmakers are considering, Colorado taxpayers who will be footing the bill for the proposal have been largely excluded from the process. In fact, just days before the protracted debate on the public option, it was reported that House Bill 1232 wasn’t a public insurance option at all and that “Democratic legislators said they’d made a deal with the health industry to scrap the public option and instead mandate lower premiums for those buying coverage on the individual or small-group markets.”
Public option or not, it is clear that government price controls are once again being pitched as the cure to solving health care problems in Colorado. House Bill 1232 would empower the unelected Commissioner of Insurance to mandate arbitrary prices based on the whims of politicians. Unfortunately, lawmakers who support rate-setting have given little thought about how price-setting would affect patients across the state, the doctors who serve them, or the entire health care system that supports them.
As the Colorado General Assembly has considered House Bill 1232, it is the big insurance companies that have been pressuring lawmakers to include government rate-setting as the mechanism to control prices within that taxpayer-funded public insurance option.
It’s easy to see why the big insurance companies are pushing for rate-setting: it would lower the amount they would have to pay out to doctors. Meanwhile, the big insurance companies would continue to take in big money to provide price-controlled coverage. In other words, the big insurance companies are simply aiming to line their pockets at the expense of taxpayers and at the peril of patients and their doctors.
And that’s just the beginning. This rate-setting would inevitably lead to a scarcity of care and a reduction in quality. Rate-setting would result in fewer doctors being available to see patients in Colorado. There would be fewer ambulances and fewer urgent-care facilities. This isn’t just hype. There is evidence from California to see what would happen if rate-setting were instituted in Colorado.
Lawmakers in the Golden State have tried a similar rate-setting approach to the one contained in Colorado House Bill 1232, and the effects have been devastating. According to a 2019 analysis in the American Journal of Managed Care, doctors took a huge pay cut, and there were consolidations across the health care market, leaving patients with fewer and more distant options for care. Doctors reported that they were considering leaving California when they were no longer able to negotiate with the insurance companies and this would result in patients having to travel farther and farther to access even the most basic care, let alone more specialized medical procedures. It’s no surprise that in California, the number of patient complaints has gone way up.
Advocating for government rate-setting as a “fix” to health care costs via a public option allows lawmakers to posture and claim they are simply responding to a pressing problem, instead of radically redesigning the health care system to give big insurance another big payout, but Colorado taxpayers deserve better.
Colorado lawmakers have not been upfront with the citizens of Colorado. If House Bill 1232 is enacted into law, patients would suffer and insurance companies will profit. Coloradans should be asking their lawmakers whether the government price controls in House Bill 1232 are really just another big payout for big insurance.
David Williams is the president of the Taxpayers Protection Alliance. A version of this article appeared in The Center Square/Colorado on May 11, 2021. Republished with permission
