Colorado bills to reduce cost of health insurance, prescription drugs signed into law

As part of Colorado Democrats’ plans to reduce health care costs, Gov. Jared Polis signed two bills Wednesday meant to create a more affordable health insurance option and a prescription drug review board.

“You know what, Coloradans are sick and tired of getting ripped off on the high cost of prescription drugs,” Polis said, adding later that both bills faced heavy lobbying, which in his mind indicates they will bring real change.

“These are more than just nibbling around the margins of saving people money on health care,” he said.

HB21-1232 is the result of the long-anticipated “Colorado Option” benefit plan — initially meant to be a true public option. The new law would require insurance companies to work with providers and the state to create a new health insurance plan for the individual and small-group markets by Jan. 1, 2022. Premium costs must be 15% cheaper than their 2021 rates within three years (adjusted for medical inflation), and the plan must cover specific benefits like pediatric care and other benefits that are considered essential.

About 15% of Coloradans buy their health insurance on the small group and individual marketplaces combined, but the bill sponsors hope people who are uninsured can afford the new option and will boost the percentage of insured people.

The bill was backed only by Democrats, with Republicans saying the bill is too much government involvement in the private sector and a step toward free government-provided health care.

The new law also specifies that insurance companies should create networks to help reduce health disparities.

“Health care equity and access to quality care will now be the standard in Colorado for all people,” Aurora Democratic Rep. Iman Jodeh said. “This will be especially true for (Black, Indigenous and people of color) communities who have been traditionally marginalized, overlooked, and undermined when it comes to their health while having a seat at the table, giving voice to the services they need at the cost they can afford.”

Polis also signed SB21-175, which would create a Prescription Drug Affordability Review Board  tasked with assessing the cost of drugs. The board also can set new price limits for 12 drugs per year, and make additional recommendations for other drugs as well.

Work to establish the board can begin immediately and board members have to be appointed by Jan. 1, 2022.

Other states like Maine and Vermont have these types of boards, but Colorado is the only state so far to allow the board to set price ceilings for certain drugs.

“Whether it’s in clinic or whether we’re talking to my constituents, Coloradans are incredibly alarmed by the prices of prescription drugs and health care overall, so I think that by putting pressure on a system that has just kind of been able to charge whatever they want in the United States, that will be making a difference for for health care prices in the future,” said sponsor Rep. Yadira Caraveo, a Thornton Democrat and a pediatrician.