(The Center Square) — A new study urges Colorado lawmakers to consider five concerns about a state-controlled health care plan they might consider when they return to the General Assembly to resume the 2021 session.
The study, by the Common Sense Institute (CSI), a free market think tank, says those concerns include cuts to hospital funding during a global pandemic, increasing costs of insurance premiums, and the state’s hospital reimbursement rates.
“In short, even before COVID-19 took a massive toll on the state’s health care system, there was significant concern about cutting hospital budgets or further increasing private insurance costs in order to pay for the public option,” the study concluded.
The public option was introduced during the 2020 session as House Bill 1349. However, the legislation stalled because of the COVID-19 pandemic.
In May 2020, CSI published a study on the legislation that found the public option would have cost hospitals over $500 million in both 2022 and 2023 before ballooning to a $1.1 billion deficit in 2024.
Those budget constraints could have cost over 4,800 health care workers their jobs, representing a 7% overall decline in the hospital sector, according to the study.
Meanwhile, COVID-19 created a budgetary crisis for Colorado’s hospital sector all on its own. Recent estimates from the Colorado Hospital Association found hospitals anticipate losing up to $7.1 billion before the pandemic ends.
CSI concluded that implementing the public option would only make this situation worse, especially for rural hospitals. Even when accounting for federal pandemic relief funds, CHA projections show an estimated 8% revenue shortfall by the end of 2020, with losses deepening to 11% during 2021. This could cause up to 23 rural hospitals to close, according to the study.
While hospital budgets continue to hemorrhage from the pandemic, CSI said taxpayers will be left to pick up the bill.
If the public option passes, CSI estimated taxpayers will see a 2.6% increase in the cost of care by 2022, and a 2.71% increase in 2023. By 2024, however, the cost of care would spike 5.21%.
“Calling into question some of the most impactful components of the public option debate, does not mean that no problems exist. It should only reinforce the need to improve regulation surrounding health care markets, which can achieve shared goals of slowing consumer prices while mitigating the unintended consequences of newly intrusive legislation,” the study said.