Colorado lawmakers introduce public insurance option: 12 things to know

After months of debate and opposition from hospitals, Colorado lawmakers introduced a bill this week that would create a public health insurance option in the state, according to the Colorado Sun

Here's what you need to know:

1. The bill would give Colorado residents who purchase insurance on the individual market another health plan option. The idea is to boost competition to lower premiums and cut costs for patients.

2. The insurance plan would be administered through private insurance companies, but Colorado regulators will set the prices that hospitals can charge patients covered by the public option. 

3. Prices will be set using a formula developed by state officials.

4. For most hospitals in the state, this government-dictated formula will mean a pay cut. This is how the proposal aims to create savings for patients and why many hospitals oppose it. Supporters estimate the formula would slash hospital prices by 40 percent on average statewide, according to the Sun.

5. Colorado plans to set the payment rate at 155 percent of Medicare's rate. No hospital would be paid less than that. 

6. Hospitals can make more money with the public option if they adhere to certain criteria. Independent hospitals and critical access hospitals would see a 20 percentage point bump, according to the Sun. 

7. Hospitals that treat large numbers of patients on Medicare and Medicaid are also eligible for more, and hospitals that have done a good job of controlling costs for patients could also get additional bumps.

8. The hospitals that will lose the most money are the ones that charge the most. This is because they won't be eligible for some of the rate bumps under the state's proposed pricing method.

9. Hospitals would be required to participate, and it would begin Jan. 1, 2022.

10. Hospitals that do not opt in would first get a warning from the Colorado Department of Public Health, then face fines of $10,000 for a month, and eventually be subject to fines up to $40,000 a day. From there, the department could potentially "suspend, revoke or impose conditions on the license" of any hospital not participating in the public option, according to the Sun. 

11. The private-public insurance plan has drawn opposition from insurers and hospitals, which argue that it will not do much to control healthcare costs. 

12. Senate Majority Leader Steve Fenberg, a Boulder Democrat, told the Denver Post: "We're not doing this bill to please insurance companies or hospitals. We're doing it to provide relief for everyday people."

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