Fact Check: Does Colorado Really Have Some of the Highest Health Insurance Costs in the Nation as Public Option Supporters Claim?

March 25, 2021 / The Denver Post
Flatlining ECG line indicating claims are false

Two lawmakers who are pushing for a new state-controlled healthcare plan argue that Colorado has some of the highest health insurance costs in the nation, and that a so-called “public option” would lower premiums for everyone. They are wrong on both counts.

CLAIM #1: “Colorado has some of the highest health insurance costs in the nation,” State Representative Dylan Roberts and State Senator Kerry Donovan wrote in a Vail Daily guest commentary.

FACT:

This claim is false. It is contradicted by the data and ignores recent progress that Colorado has made in reducing the cost of health insurance in the marketplaces created by the Affordable Care Act. 

The Kaiser Family Foundation tracks health insurance benchmark premiums under in ACA markets across all 50 states and the District of Columbia. Using these benchmark premiums, it’s possible to compare Colorado’s costs to the national average and to the performance of other states. 


As we have covered before, after tracking national trends for a number of years, Colorado is now significantly below the national average when it comes to the price of health insurance on the individual market.

But that’s not all. When ranked against other states, Colorado’s benchmark premiums in the ACA market for individual health insurance are the sixth lowest in the nation, according to a KFF analysis of federal and state health insurance trends.

This is because Colorado’s ACA benchmark premium has fallen 28% since 2019, and now stands at $351 per month before federal subsidies that further reduce the cost for low- and middle-income households.

Ironically, state officials have credited Colorado’s new reinsurance program for these premium reductions – a program that Representative Roberts and Senator Donovan both supported. It is difficult to understand why these lawmakers would refuse to recognize this recent progress and instead misrepresent Colorado’s track record on reducing the cost of ACA insurance since 2019. 

CLAIM #2: In their guest commentary, Representative Roberts and Senator Donovan also say “studies show that a public option will lower premiums across our state by 9-18% for everyone.”

FACT:

This claim is also untrue.

The lawmakers are citing a report on the public option from the Polis administration in late 2019. But the actuarial analysis in the report makes clear than any real reduction in premiums will be limited to the relatively wealthy households that don’t typically qualify for ACA subsidies. 

Specifically, the actuarial analysis on the public option states: “[S]ubsidized members who choose to remain in their current plan, rather than switching to the public option would see an increase in their net premium after subsidy.”

In other words, while wealthier households may see some savings under a public option, poorer households will pay more. 

More recently, a Colorado think tank called the Common Sense Institute recently studied premium trends in Washington State, which is the only state in the country to have implemented a public option. The CSI study found premiums in Washington State under a public option were roughly 10% higher than those in Colorado, and in some areas of Washington State, the public option cost 29% percent more than traditional insurance plans.

The CSI study also concluded that Colorado’s reinsurance program had been far more effective in reducing ACA health insurance premiums than Washington State’s public option:

“Since 2018, Colorado benchmark premiums have fallen by 25.3%, compared to 15.5% increase in Washington State. … While the public option is often put forward as a strategy for lowering the cost of healthcare premiums and reducing the ranks of the uninsured, the contrast between these two states – one which has a public option and one which does not – suggest that other policy initiatives should be considered in service of those goals.”

Using both projections for Colorado and real world data from Washington State, it is clear that claims of widespread cost reductions under a public option are not supported by the facts. At best, the data suggests a small number of wealthier households may benefit