Colorado’s Emerging State-Directed Insurance Plan

The official proposal for the state option for health care is expected to be released this Friday. James Capretta of American Enterprise Institute recently wrote an article for State of Reform and raised important questions that remain unanswered: “…would physicians and hospitals be forced to participate in the state option?” Read James Capretta’s summary of the draft State Health Care Option here:

Jared Polis won the governorship in Colorado last year in part by campaigning as a champion of single-payer health care. Now in office, and with his party in control of both chambers of the state legislature, Polis is pursuing an idea that is more modest and yet not inconsequential: a state-directed insurance option in the individual market. The emerging Colorado plan, which is scheduled for implementation in 2022, might be an indicator of where the single-payer and public option debates are headed in other state capitols — and perhaps nationally too.

Polis’ original idea was to work with other western states and establish a regional single-payer health system, with the participating state governments fully in charge of running a combined insurance plan for all of their citizens. However, as political leaders in Vermont discovered, states face significant obstacles when trying to establish any variant of the single-payer idea. A major problem is that self-insured employer-sponsored plans are regulated by federal law and are outside of the control of state governments. It is difficult to establish a meaningful government-run single-payer plan with such an important and large segment of the market operating under separate rules.

Continue reading on State of Reform.

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