Witnesses at HB1232 hearing

Medical professionals wait

to testify on House Bill 1232, the public option bill on April 9

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Two of the three major opponents to the proposed public option have shifted their stance, paving the way to possible agreement on a bill that has undergone hundreds of hours of negotiation and at least three rewrites.

On Tuesday, the House Health & Insurance Committee will take another look at House Bill 1232, but it will be dramatically different from the version they reviewed in an April 9 committee hearing.

For one thing, the public option no longer exists.

On Monday, sponsors of the bill were joined by House Speaker Alec Garnett, D-Denver, to talk about the latest version, rewritten in the hopes of moving the opponents of the bill to a neutral position.  

Rep. Dylan Roberts, D-Eagle, explained that they have reached an agreement on a "strike-below amendment," which in effect becomes the bill once adopted by the committee.

"This will bring some of our largest industry partners to a position of neutral and still get to end goal of lowering health care costs," he said. "We value and thank industry partners who have been working with us for many months." 

House Bill 1232 gives the healthcare industry — doctors, hospitals and health insurers — two years to reduce health insurance premiums by 20% (10% per year) in the individual and small group market. The individual market represents about 8% of insured Coloradans; the small group market -- small businesses with 1 to 100 employees -- is about 15% of insured Coloradans.

If the premium targets are not met after two years, the bill as introduced would have the Commissioner of Insurance come up with the Colorado Option Health Benefit Plan, offered by a nonprofit corporation with its major provision setting price caps on health care services provided by hospitals and doctors. Hospitals and doctors that refused could risk their licenses.

The strike-below provision, however, eliminates the nonprofit corporation that would have offered a public option plan; instead, the commissioner creates a standardized plan that insurers must offer and hospitals and doctors must accept. It's has one setup phase of three years and uses the existing infrastructure with new rules on lowering costs and increasing access. 

Insurance carriers would negotiate rates to achieve the premium reduction targets, Roberts explained. For those carriers unable to achieve those reduction targets, the Division of Insurance will hold a rate hearing, and carriers would be allowed to present evidence on why they can't achieve those targets. Then, he said, rates will be created for that specific county and plan.

"We hope most will not get to that rate hearing," he added.

Hospitals that are "efficient in managing the underlying cost of care as determined by the hospital's total margins, operating costs and net patient revenue" will receive a 40% increase in their base reimbursement rate, according to the amendment.

Among the major changes in the revised bill is its definition of hospitals. Opponents have claimed the bill could put rural hospitals out of business, given that the original bill made no distinction between urban and rural hospitals on issues such as price. Under the revision, rural hospitals with 25 or fewer beds are defined as an essential access hospital.

The amendment also appears to give health plans some wiggle room on where they must offer the state option plan. The commissioner of insurance must take into account the number of covered lives the carrier has in each county (this would also include the large group market), the carrier's existing service areas and whether alternative health-care coverage is available in that county, including cooperatives.

In addition, the revision states the Commissioner of Insurance will not hold a carrier responsible for failing to meet premium reduction targets if the carrier identifies which hospitals or health-care providers "were the cause of the carrier's failure to meet the premium rate requirements."

The threat of pulling doctors' and hospitals' licenses is also gone. 

The Colorado Hospital Association intends to move to a position of neutral, based on the amendment being offered as well as two other additional pieces of language on rate methodology and how hospitals would be paid, according to Julie Lonborg, vice president of communications and media relations. The Colorado Association of Health Plans has adopted a position of "amend," meaning they expect further amendments.

The Colorado Medical Society is officially opposed, according to CEO Bryan Campbell, although Roberts told reporters Monday that the group is neutral on the bill. 

The deal will keep sponsors on track to having a new health insurance option that is lower in price and higher in quality for all Coloradans, no matter where they live, he said..

HB 1232 co-sponsor Rep. Iman Jodeh, D-Aurora, said health care is a human right, not based on ZIP code, residency status or skin color. "We're addressing systemic issues in health care," chipping away at health care inequities while providing quality access.

The current system isn't working, added Sen. Kerry Donovan, D-Vail, especially for the one in five Coloradans who struggle with health care costs or go without. All options are on the table so long as they can achieve the goal of lowering cost and increasing choice, she added.

Roberts said they wanted to give the healthcare industry the opportunity lower costs on their own, and heard constructive feedback that brought all parties back to the negotiating table.

He also noted that almost everyone who testified on April 9, whether for or against the bill, started off by saying they know the costs of healthcare are too high, although opponents said the bill wasn't the right way to get there. 

Officials with Colorado's Health Care Future, an opposition group, said they were reviewing the revision and would not yet comment.

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