Gov. Jared Polis said Tuesday that Coloradans are being “ripped off” by the health care industry and a public insurance option could help cut costs.
The public option is one of Polis’ top priorities in the new legislative session, but it’s already coming under fire from critics in the medical and insurance industries. Polis told Colorado Matters it’s time for the state to step in.
“America spends twice as much on healthcare per person as other wealthy industrialized countries. Our health results are in the middle of the pack,” Polis said. “In Colorado, it's actually even worse. The Colorado for-profit hospitals are the second-most profitable in the country from overcharging patients.”
For now, the public insurance option would only be offered to individuals buying their own insurance, not those with access to employer-backed plans. The state would set the parameters, including reimbursement rates for providers.
A bill to create the public option is still being drafted.
In a statement, the Colorado Hospital Association, which has opposed Polis' health care proposals, said it “continues to be committed to its work to improve affordability of health care for all Coloradans. The public option, as it currently is proposed, is the wrong solution for Colorado.”
The CHA also took the step of suing the state over the funding of Polis' reinsurance program on Tuesday night.
Polis also discussed his differences with legislative Democrats over proposals for paid family leave and about the climate change protestors who disrupted his State of the State speech.
Why it’s government’s role to create a public health insurance option:
“The real question is why are we being ripped off on health care so much? And if you look at what the public option does is it gives people a choice, because in 22 counties in our state, there's only one insurer. So there's no market, there's no choice. It's … this one or the highway. We believe every Coloradan should have a choice.
It also tries to rein in some of the money that hospitals make from overcharging patients, and it also gives, basically, small businesses and individuals the same deal with insurance companies that big businesses already have. They can't make more money off of the backs of individuals buying new insurance than they do off of companies with 500 people or a thousand people.”
On the impact of a public option on health care prices:
“It won't fix everything. It'll help modestly. This is about 5 to 7 percent of the people of the state that we're talking about. It won't affect Medicare, won't affect Medicaid, those are federal. So you know, it'll have a modest downward pressure on health care and it'll give consumers more ability to prevent hospitals from overcharging patients.”
On reducing the state income tax rate:
“One of our top four goals is a permanent tax cut for Colorado … We're not talking about any tax plan that reduces state funding. To be clear, the tax code has accumulated giveaways to particular groups and lobbyists that have over decades made the tax code very complicated.
There's an interim committee that actually reviewed some of those tax loopholes, bipartisan, (and) recommended some that could be closed. They didn't get through the whole tax code. We have a list. We're open to almost any. We would then want to eliminate those loopholes and use those proceeds to reduce the tax rate for everybody.”
On whether the state or private industry should administer proposed paid family medical leave:
A legislative committee recommended the state administer a family medical leave program that most employers would be required to offer. Polis says the state should require employers to provide the leave but allow them to provide it themselves or contract with an insurer.
“Part of the role of governor is we have to look out for the fiscal wellbeing of the state, the integrity of the state. It would be a net negative if there were to be an additional fiscal risk to the state in administering a program when you can accomplish the same policy goals, and the policy goals are people get paid family leave without having to have the state involved. We can simply say it's private. Insurers can do it or companies can do it themselves.”
On climate-change activists who protested at his State of the State speech:
“I think that people being involved and active is absolutely terrific. Sometimes activists want to get arrested to help get more publicity. And that is a tactic that has a long precedent in American history and it's an appropriate one to get in the newspaper with your concern.
So, I mean, that's fine. I think that if they're pushing for climate action then hopefully they'll be able to succeed in getting the legislature to do additional work around climate action. I don't know whether those tactics always work. Honestly, sometimes they backfire and they alienate the legislators whose votes they need.”
Ryan Warner: Governor, thanks for being with us again.
Gov. Jared Polis: Always a pleasure, Ryan.
RW: I'd like to start with the public option. It would start with Coloradans who buy their own insurance. That's about 200,000 people in this state. Why is this government's role?
JP: Yeah, well, the real question is why are we being ripped off on healthcare so much? And if you look at what the public option does is it gives people a choice because in 22 counties in our state, there's only one insurer, so there's no market, there's no choice. It's this one or the highway. We believe every Coloradan should have a choice.
It also tries to rein in some of the money that hospitals make from overcharging patients and it also gives, basically, small businesses and individuals the same deal with insurance companies that big businesses already have. They can't make more money off of the backs of individuals buying new insurance than they do off of companies with 500 people or a thousand people.
RW: You say, in no uncertain terms, people are being ripped off. I want you to be precise about who's doing the ripping off.
JP: It's bad out there, Ryan. First of all, as a country, America spends twice as much on healthcare per person as other wealthy industrialized countries. Our health results are in the middle of the pack. In Colorado, it's actually even worse. The Colorado for-profit hospitals are the second most profitable in the country from overcharging patients. Now what they're doing is they're actually using some of the money they make from overcharging patients to actually lobby and engage in attacks against these efforts to save people money on healthcare.
Obviously we all have our frustrations with insurers as well. This public option doesn't cut them out in any way, it works through them, but what it does is it makes sure that they can't make more money off of individuals and small businesses than they do off of covering the 500-person company or a thousand-person company.
RW: Why is it the government's role, the state government's role, to tell an insurance company what they can and can't make?
JP: Well, insurance is a very heavily regulated space. First of all, the biggest payers in healthcare are government payers, Medicare and Medicaid by far are the two biggest payers. We also have a VA system. When you look at all the private payers out there, the insurers, they operate under a system of rules. Why? Because otherwise, they would probably just insure healthy people and not insure sick people. I mean, this is why we have insurance. Just because you're a cancer survivor, just because you have a bad heart doesn't mean you shouldn't be able to buy insurance.
These are regulated products for a reason. Otherwise, they simply wouldn't function as such -- insurance wouldn't really exist because the only people that could get it would be people that were low-risk and healthy.
RW: You're saying this is already the state's domain. This is just a furtherance of that role. I just want to point out …
JP: I would say it's a fixing of the role. Again, when we talk about the public option, it's not one that the state runs; it's run through private insurance companies.
RW: So just to be clear, assuming a public option becomes available, the government doesn't become the insurer.
JP: No. There's probably people who propose that. That's not what this public option is or many of the mainstream public option proposals. The government's not the insurer. And it's a choice. Nobody has to choose it. It'll be a choice in 22 counties that have no choice today. At least there will be a choice, which is important for a market to work. Markets can't function without consumers being able to make informed choices.
RW: Okay, so the shot across the bow here, you say hospitals in Colorado are ripping people off. This is going to be a huge controversy this session. The Colorado Hospital Association has called your plan unacceptable. A couple of national groups are already spending tens of thousands of dollars on ads. I want to look at one …
JP: I think hundreds of thousands, Ryan. And I think that means we're getting close to the solution here because if we have them that upset, it probably means that we're actually getting something done to save people money. And by the way, every one of your listeners, I'm sure if you've ever had an experience with a hospital, you know that they're overcharging too because you've seen those bills. Even if your insurance pays for it, you're like, "Thank goodness I have insurance." But you say, "Oh my God, it was $600 for like half an hour." I mean you literally see that.
RW: One of the hospital association's key arguments is that the state would limit how much hospitals could charge patients with the public option. Given the formulas in your plan, the hospitals say they'd lose about $1.5 billion in payments from these individual policies over five years and they argue they'll have to shift those costs to people on employer plans and so costs for those people, just a significant portion of Colorado, will rise. Do you dispute that?
JP: No actually this will help drive down rates for everybody. We all want thriving hospitals. We just don't want among the most profitable hospitals in the country ...
RW: But talk to this cost shift …
JP: The reason this will lead to cost shifting downward for large businesses and large group plans is because, and this is one of the reasons that the hospitals oppose it is they know that once we have these publicly negotiated rates through the public option than many of the other private insurers will peg their rates to those lower reimbursement rates to prevent that overcharging that is an epidemic in healthcare today …
RW: So you think this will be a redefining of the marketplace in general then?
JP: It won't fix everything. It'll help modestly. This is about 5 to 7 percent of the people of the state that we're talking about. It won't affect Medicare, won't affect Medicaid. Those are federal. It'll have a modest downward pressure on healthcare and it'll give consumers more ability to prevent hospitals from overcharging patients.
RW: It's interesting. There's a statement that caught my eye in your plan. It says, "We are collaborating with rural and critical access hospitals to ensure their financial sustainability through the public option.” So help me understand the concern you have there about rural hospitals versus the kind of fat cat picture you paid of hospitals in general.
JP: Yeah, so making sure that you have healthy providers in rural communities is absolutely critical.
RW: Are they at risk?
JP: Yes, without the public option, many of them are at risk. They rely heavily on Medicaid, which we don't ultimately control. It's federal, we administer it, but the public option would be a huge boon to helping make sure that we have our critical access providers that are solvent in our rural and underserved community.
RW: Because presumably there would be more people walking in their doors who have insurance …
JP: With insurance, that's right. Because again, what is the biggest -- they have people walking in their doors without insurance or only with Medicare, Medicaid, which are much lower reimbursement rates. It makes a big difference to their bottom line if even 3 or 4 percent more of their customers have insurance and therefore are reimbursed.
RW: We spoke recently with Senator Chris Holbert. He's the minority (Republican) leader in that chamber. He said, "You should hold off on the public option for this year."
(Sen. Holbert:) I think that we should not move forward on that at least not this year. That we should allow the reinsurance bill that was passed last year more time to have hopefully greater influence.
RW: For background, the legislature approved reinsurance last year. It pools money to pay some of the most expensive healthcare claims, presumably reducing premiums for people who have individual insurance. That said there are estimates that this is going to cost more than you expected. You added almost $20 million to this year's budget for reinsurance. Would it be better to take this one step at a time? Are you biting off more than you can chew in healthcare?
JP: First of all, yes, with the successful implementation of the bipartisan reinsurance program, it drove down rates in the exchange for individuals down by an average of 20 percent statewide. That's huge. The savings are greatest in Western Colorado, Southern Colorado and in Eastern Colorado. Very successful. It's time to build upon that. That didn't solve everything with regard to health care.
RW: Let's talk about the environment now, one of your priorities as well. We've got a couple of questions about this from Twitter, including one from Deborah Kay Kelly of Boulder. She asks, "When will he (Jared Polis) declare a climate emergency in Colorado?"
JP: First of all, I've never shied away from using the words climate and emergency in the same sentence and I'll be happy to say it again now, Ryan. We're having an emergency with regard to climate. There's not an emergency power of the governor in this area. I mean when there's an incident, like there's a fire or there's a disease outbreak, I can declare an emergency around a narrow set of criteria and I temporarily have additional authority.
We have a strong authority with regard to combating climate change. We worked very hard last year on setting statewide emission goals. We have a goal of 100 percent renewable energy by 2040. Excel, our largest electric utility, is going to be 80 percent carbon-free by 2030. Tri-State, which has 17 member co-ops across our state, they're going to have a 90 percent reduction in carbon emissions from where they are now by 2030.
RW: The call for tougher action on climate change came directly to the Capitol, as you know, last week. Protestors disrupted the House chamber just before your State of the State speech. They tossed some flyers from the balcony, shouted climate change slogans. Here's one chant just as you began your speech.
Polis to the State of the State audience: Good morning
Protestor: Ban Fracking Now. Ban Fracking Now.
Polis: Good morning, everybody.
JP: I would just say, look, I think that people being involved and active is absolutely terrific. Sometimes activists want to get arrested to help get more publicity and that is a tactic that has a long precedent in American history and it's an appropriate one to get in the newspaper with your concern. So I mean, that's fine. I think that if they're pushing for climate action, then hopefully they'll be able to succeed in getting the legislature to do additional work around climate action.
I don't know whether those tactics always work. I mean, honestly, sometimes they backfire and they alienate the legislators whose votes they need.
RW: It doesn't sound like they alienated you, governor.
JP: Oh look, I'm from Boulder. I'm accustomed to a far worse Ryan.
RW: You're listening to our regular conversation with Colorado's Democratic Gov. Jared Polis. Our focus, some of the thorniest issues at the legislature this year, and his priorities longer term, like reducing the state income tax.
JP: One of our top four goals is a permanent tax cut for Colorado. Our top four goals, very simple. Full-day kindergarten for every child and expanding preschool. We're working on that. Saving people money on healthcare. Moving the state towards 100 percent renewable energy by 2040 and permanent reduction to the income tax rate. We absolutely celebrate temporary tax cuts along the way, but we're going to continue our work to try to broaden the base and lower the rates.
We're not talking about any tax plan that reduces state funding, to be clear. The tax code has accumulated giveaways to particular groups and lobbyists that have over decades have made the tax code very complicated. There's an interim committee that actually reviewed some of those tax loopholes, bipartisan, recommended some that could be closed. They didn't get through the whole tax code. We have a list. We're open to almost any. We would then want to eliminate those loopholes and use those proceeds to reduce the tax rate for everybody.
RW: Here's an issue from last year that's back. A paid family leave. A lot of people including you had doubts about the 2019 bill and so it went to a study committee and you apparently have some differences with them. They want the state to run the paid family leave program. You asked them to consider requiring that companies provide the leave but allow them to purchase plans on the private market. Why would private paid family leave be better?
JP: Part of the role of governor is we have to look out for the fiscal wellbeing of the state, the integrity of the state. It would be a net negative if there were to be an additional fiscal risk to the state in administering a program when you can accomplish the same policy goals, and the policy goals are people get paid family leave without having to have the state involved. We can simply say it's private. Insurers can do it or companies can do it themselves.
By the way, many companies ... almost half of the employers in Colorado already offer some kind of paid family leave. We would like to get it to a good number where families can afford to take that time off.
We have federal protections that provide for unpaid time off, but there's two deficiencies for that. One is it's unpaid and not everybody can afford to take unpaid. Again, half the employers pay, but the others don't. The other problem with that is it's only for companies that are 50 and up.
So this can go smaller, whether it's 20 or 30 people, whatever that level is. It can be smaller than the federal. It can be more inclusive and it can make sure that there is some pay. It doesn't mean 100 percent of your salary while you're off. But whether it's 60, 70, 80, 90 percent it might depend on how much you make, what that substitution is, but at least people can spend those precious first few weeks of life with their child without having to not be able to make their rent payment or mortgage payment.
RW: I spoke with the Democratic speaker of the state House, K.C. Becker, who says one advantage of a state-run program is that it's less likely to result in discrimination, might be better positioned to serve low-wage workers. If a bill came to your desk with a state-run program would you sign it?
JP: Well, first of all, we're not going to accept any program that has discrimination in it. It doesn't matter private, public, I mean we're not going to allow different people to be charged different amounts.
RW: Would you sign it if it came to you as a …
JP: As I articulated to the sponsors, the reasons that I don't support that model are one, it would put the state on the hook fiscally. Two, it would take many more years to implement. We'd like to get paid family leave to workers by 2022. We've heard proposals that say 2024. We don't support that. We think 2022 is a better way to do it. And third, again, we think that we should do this in a way that allows the private sector and the businesses the choice on how to do it right. Do it yourselves, insure for it, it's up to you, but just make sure your workers get this benefit.
I would just say, look, we want to work with the legislature to make sure that more Colorado workers have paid family leave and that's our basic value. I think it's a basic value of most members of the legislature. And I think that we can work together and iron out these details to make sure it's a program that works that doesn't put the state on the hook fiscally and that could implement these benefits sooner rather than later.
RW: I'd like to talk about transportation. In my interview recently with Sen. Holbert, the Republican leader in the Senate, he said Republicans want $300 million more for transportation than you set aside in this year's state budget. What's your response to that?
JP: Well, I would say, let's have a discussion. I think any major movement on transportation will be bipartisan. Let me start by taking a step back and talking about the problem: We've had huge increases in population in our state and we've had diminishing funding for roads because of the main funding source, gas tax, which has been decreasing over time. So if we can work together, I think Republicans and Democrats could come up to a solution. Sen. Holbert wants to put on the table more general fund money. I think Democratic leaders, myself included, say that's absolutely an appropriate part of the discussion. It's not everything, but that's part of the discussion. So I think there's a huge opportunity for this legislature to step up and do something big and bold on transportation ...
RW: How about raising the gas tax?
JP: Well again, I think that the Democrats and Republicans have a wide variety of things that they can talk about when we talk about funding our roads. The gas tax does fund our transportation system. There's other vehicles that don't pay the gas tax. We talked about perhaps the need for regional areas to be able to go to the ballot around specific projects versus these statewide initiatives.
Here's the issue. Three different initiatives that would have funded our roads in two years failed at the ballot box. And yet voters are still complaining to their Democratic and Republican legislators there's too much traffic, do something about it. So we want the legislature to step up, the Republicans and Democrats to step up and have a real solution that will reduce congestion and traffic and deliver for Coloradans.
RW: Are you bringing them ideas? Is this something you're managing --
JP: We're happy to work on any ideas. We are happy to work with Republicans and Democrats on big, bold ideas to deliver on transportation. We're very skeptical about going to the ballot again because they've gone three times and they failed. That's why in my State of the State speech, we said, "You know what? The voters have spoken. They want us in this building to address a traffic and congestion."
RW: If you're skeptical about going to the ballot, that would mean the gas tax is probably not at the top of your list because that would require a vote, would it not? A popular vote?
JP: We're up for whatever the Democrats or Republicans agree on. They have a lot of fiscal tools that they can use and we're just hopeful and encouraging that Republicans and Democrats can figure out a path forward that meets the funding deficit.
RW: All right. You had a little fun at a press conference last month, polishing up your nerd credentials, governor.
(Polis at a December event:) “So do you all know why Star Wars came out in the order four or five, six, one, two, three? Because in charge of the sequence, Yoda was.”
RW: So Star Wars 9, “The Rise of Skywalker” came out over the holidays. What's your review of it?
JP: Oh, I liked it. I think that sometimes critics are just far too tough. I think it was good quality. Our 8-year-old son loved it. We watched all the others in the lead-up to it. I think it tied up a lot of loose threads. Not everybody likes the way it tied up every thread and I'm sure it leaves a few more. But overall I thought it was good. It was cool to see the ultimate villain, Palpatine, come back. I think it really worked on establishing Rey's character and brought the kind of Leia and Luke saga to a close. I'm not giving away too much I hope. A lot of that was …
RW: Yeah, I was wondering.
JP: I thought it was very good. And if you haven't seen it by now, you're probably not too hardcore because it's been out for several weeks already.
RW: The critics might be too tough. It's funny. I'm wondering if you're talking about politics or Hollywood.
JP: Politics, of course. What are you talking about?
RW: Governor, thanks so much.
JP: Thank you.
RW: Our regular conversation with Colorado Gov. Jared Polis. Before we go, a little something from the Colorado Hospital Association. A spokesperson tells me, "Hospitals share the governor's goal to make care more affordable. It's just that they don't believe a public option is the right path." I'm Ryan Warner, CPR News.