Approximately 35,000 people enrolled in a Colorado Option health insurance plan in the program’s first year, Gov. Jared Polis announced Tuesday during his State of the State address.

The number includes approximately 25,000 people who signed up for a Colorado Option plan through the state’s Connect for Health Colorado shopping exchange. Another 10,000 people signed up through OmniSalud, a new program that offers state-subsidized insurance plans to people who lack immigration documentation and, therefore, are not eligible for federal subsidies available on the main portal Conectate por la Health.

The number provides some of the first data to show whether the program, which has been nearly two years in the making and is a major health policy initiative for cops and House Democrats, is succeeding. But unsurprisingly, interpretations of the number were widely divided on Tuesday.

Polis touted the number as “exceeding original enrollment goals,” and Colorado Insurance Commissioner Michael Conway said in a statement that enrollment “far exceeded my hopes for what we would accomplish in our first year.”

The Colorado Option is a state-designed insurance plan sold by private insurance companies, who get rewarded if it’s profitable and bear the risk if it’s not. It’s basically Colorado’s market-based solution for creating a public health insurance option. Colorado Option plans are currently only available in the individual and small group markets. Those are the places where, respectively, small businesses buy plans for their workers and where people who don’t have coverage through an employer buy coverage on their own.

The Colorado Option is intended to provide better coverage than normal and is required to sell at lower-than-average prices, though critics question whether it has been successful on either front.

Exceed expectations

As of Jan. 10, more than 192,000 people had signed up for a health plan through Connect for Health, according to the exchange. Open enrollment ended on January 15, and final open enrollment numbers are not yet available, meaning the Colorado Option enrollment number and total number could still increase. But right now, Colorado Option signups make up about 13% of total signups on the main exchange.

While the state has never released a projected number for Colorado Option enrollment, Vince Plymell, a spokesman for the state Division of Insurance, said the agency internally expected 5% to 7% of total enrollments, which means that the actual number is about double what they say they expected.

“Perhaps I shouldn’t be surprised,” Conway said in his statement. “These plans not only create more competition in our insurance marketplace, but they offer better value to Coloradans, with many services that lead to better health outcomes offered at no or low cost.”

For advocacy groups that support the Colorado Option, the numbers demonstrate the value the plans bring to the marketplace.

“It should come as no surprise that Colorado has outpaced national trends with our CO Option insurance enrollment because we gave people what they said they wanted,” Jake Williams, CEO of Healthier Colorado, said in a statement.

Critics back off

But for opponents of the Colorado Option, the enrollment numbers show that the plans simply didn’t appeal to many people, despite the state’s efforts to bring the Colorado Option to the marketplace.

The website for Connect for Health Colorado, the state’s health insurance exchange, displayed in October 2018. (Eric Lubbers, The Colorado Sun)

Initially, the state had Colorado Option plans show up first in search results on Connect for Health. For people whose existing health insurance company was going out of business, the state automatically assigned them to a suggested Colorado option plan, with more work required if they wanted to choose something else. The only plans available through OmniSalud were the Colorado Option plans.

And, while the state said customers could collectively save $14.7 million by choosing the lowest-cost Colorado Option plan available to them instead of automatically renewing their existing plan, Colorado Option plans were often not the least expensive available to consumers.

“Most Coloradans have agreed that a non-standard private insurance plan is better for them,” Brandon Arnold, associate director of the Colorado Association of Health Plans, said in a statement.

“Over 87% of Coloradans find better value through Coloradan health insurance providers, but efforts that could save people money on health care, such as easing the regulatory burden, have been lacking.”

That point is echoed by many insurance brokers: people who help consumers shop for insurance plans. Meagan Fearing, president of the Colorado State Health Insurers Association, a brokerage group, said Colorado Option’s plans were often not the best fit for the consumers she and other brokers worked with. That made her question whether the show is worth the effort put into it.

“I would say the numbers are a bit higher than we expected,” Fearing said. “But I would also say it’s disappointing that we’ve been through all of this for a fraction of our state’s population.”

Bigger fights to come

While there is not expected to be any legislation to modify the Colorado Option significantly this session, at least none with a realistic chance of passing, the health insurance wars will likely remain hot in 2023.

This is the first year that the Division of Insurance has the authority to take carriers to a public hearing if the prices of their Colorado Options are not low enough. (Insurers must sell the Colorado Option at progressively lower prices during the first three years of the program, falling to 15% below 2021 rates in 2025, after accounting for inflation.)

Those hearings, in turn, could lead to unprecedented regulatory action by the state government, including being able to tell hospitals how much they can charge for a service, in order to lower Colorado Option prices.

For health reform advocates, the hearings are where the benefit of the Colorado Option program really begins to kick in. And the regulatory authority shown in those hearings will make Colorado Option even more attractive to consumers next year.

“Some in our health care system have been trying to avoid accountability,” Adam Fox, deputy director of the Colorado Consumer Health Initiative, which supports the Colorado Option, said in a statement. “With this increased transparency, we will ensure that the industry lives up to the standards Coloradans deserve, making the Coloradan Choice plans that much more effective next year.”