https://mailchi.mp/097beec6499c/the-weekly-gist-april-30-2021?e=d1e747d2d8

We’ve closely tracked Colorado’s pursuit of its own public option insurance plan, which seems now to have reached a compromise that will allow a bill to move forward, according to reporting from Colorado Public Radio. The saga began two years ago when state legislators passed a law requiring Democratic Governor Jared Polis’ administration to develop a public option proposal. Amid the pandemic and broad industry opposition, progress stalled last year on the proposal. Lawmakers picked up the proposal this session, and have made progress on a compromise bill now poised to pass the state’s Democratic legislature.

Unlike the earlier version, the new legislation would not lay the groundwork for a government-run insurance option, but rather would force insurers to offer a plan in which the benefits and premiums are defined and regulated by the state. The bill would also allow the state to regulate how much hospitals and doctors are paid.

In the current version, hospital reimbursement is set at a minimum of 155 percent of Medicare rates, and premiums are expected to be 18 percent lower than the current average. While state Republicans and some progressive Democrats are still opposed, the Colorado Hospital Association and State Association of Health Plans are neutral on the bill, largely eliminating industry opposition. 

The role hospitals played in fighting the pandemic surely paved the way toward the compromise bill, which is viewed as much more friendly to providers than the previous proposal. With the Biden administration unlikely to pursue Medicare expansion or a national public option, we expect more Democratic-run states to pursue these sorts of state-level efforts to expand coverage.

In the wake of the pandemic, providers are well-positioned to negotiate—and should use the goodwill they’ve generated to explore more favorable terms, rather than resorting to their usual knee-jerk opposition to these kinds of proposals.