State Option for Health Coverage Tackles Costs Head-On

State agencies release draft report on developing a State Option.

DENVER (Oct. 7, 2019) – Today, the Colorado Division of Insurance (DOI) and the Department of Health Care Policy & Financing (HCPF) issued a draft report on the development of a State Option for affordable health insurance coverage. The report is the result of HB19-1004, passed in the last legislative session, which directed the two agencies to create a plan for such an option. 

This proposal is designed to save people money on health insurance, and would be available starting in 2022. The concepts in the draft solution were crafted through a robust stakeholder process, which solicited input from communities across the state. Key features and advantages of the proposal include the following:

  • Coloradans across the state are projected to save 9-18%+ on individual premiums.
  • Plans will be administered by insurance companies and sold on Connect for Health Colorado, so people who receive federal subsidies can use them to buy the product.
  • There are very low administration costs and no financial risk to the State or taxpayers.
  • Hospital reimbursements will be set by the State at a level that: 
    • protects rural hospitals 
    • allows for profitable care delivery
  • An Advisory Board will be established to maximize ongoing stakeholder collaboration.
  • Licensed insurance agents will receive commissions for selling State Option plans.

“The stakeholder process was instrumental in crafting the draft solution. I am proud of the thoughtful contributions made by Coloradans, hospitals, doctors, and employers across the state,” said HCPF Executive Director Kim Bimestefer. “I am confident we’ve met the requirements of HB19-1004. Now it is time for Coloradans to speak out again to share their thoughts to further influence the final proposal and next steps.” 

Bringing down the costs of health care

The reason health insurance is so expensive is that health care itself is expensive. According to the actuarial report commissioned for this proposal (prepared by the Wakely Consulting Group), Colorado hospitals charge an average 289 percent of what Medicare pays for services - meaning 2.89 times what Medicare pays – which is higher than most other states (Medicare is often used as a benchmark to compare health care prices). Additionally, a recent report from the Center for Improving Value in Health Care (CIVHC) showed that there are no standard prices for care in our state, with a variation of more than 400 percent across Colorado for the same services.  

“We have to build a more rational health care system,” said Colorado Insurance Commissioner Michael Conway. “Consumers and employers in our commercial markets should not be paying nearly three times as much as Medicare like they are today. All of us - the State agencies, the insurers, the hospitals and the many more stakeholders - have to come together to make the State Option work for Colorado.” 

To address this critical affordability problem, the proposed State Option will bring more logic to the system by paying hospitals 175 - 225 percent of Medicare. The plan will include a special focus on addressing and protecting rural and critical access hospitals to ensure their financial sustainability and continued access to care for the communities served by those hospitals. 

“More insurance options means more choices for consumers and more competition in the insurance market -- competition in a market reduces rates for everyone,” said Governor Jared Polis. “I look forward to working with the legislature and key stakeholders to implement this program so Coloradans can start saving more money on health care."

Who is this for?

This proposed option would be available to any Colorado resident. Initially, the plan would be available to any Coloradan on the individual market. The recommendations would scale the plan up to serve Coloradans on the small group market. However, such wide availability does not mean it will always be the best option for everyone, especially for those on Medicaid or Medicare or people who get coverage from an employer. This would give every Coloradan an additional choice, so people have more power to choose the option that is right for them.

Comment Period: October 7 - 25

With the release of the draft report on October 7, a comment period is now open until October 25, 2019. Written comments regarding this report and its proposals will be accepted during this time. After October 25, the two agencies will review comments and work to finalize the report, which is due to the Legislature on November 15. 

Written comments can be submitted via or via email at  


The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA) regulates the insurance industry and assists consumers and other stakeholders with insurance issues.  Visit for more information or call 303-894-7499 / toll free 800-930-3745

DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit for more information or call 303-894-7855 / toll free 1-800-886-7675

Media Contact:
Vincent Plymell
Division of Insurance 
p: 303-894-2261 | c: 303-910-9614