A new study from Brown University’s School of Public Health has found that the Colorado Option, a state health insurance plan, has led to significant reductions in individual market premiums. The research compared premium changes across states and determined that the introduction of Colorado Option plans resulted in premium decreases of more than $100, including for non-Option plans. This contrasts with trends in other states where health insurance premiums have risen by nearly 10% each year.
The study, funded by the Commonwealth Fund, focused on how the Colorado Option affected premiums for the lowest- and second-lowest-cost silver plans. Researchers controlled for factors such as age, rating area, plan actuarial value, and the number of insurers participating in the exchange when comparing Colorado to similar states. The findings suggest that public option plans like those offered in Colorado may help provide more affordable coverage options for people who buy their own insurance—especially in areas where provider and hospital prices are high.
“These findings are encouraging for the future of public standardized options. The Colorado Option helps to provide affordable coverage while managing premium increases that come from increased hospital and provider prices,” researchers noted.
For consumers in Colorado, this means lower premiums not only for those enrolled in Colorado Option plans but also across all individual market offerings. Those who choose a Colorado Option plan also pay less out-of-pocket and benefit from simpler coverage structures.
Division of Insurance Commissioner Michael Conway said: “The Colorado Option encourages people to go beyond just having insurance and actually use it with transparent pricing and benefits that they can use. We’re glad to see this research from Brown back up the great things being accomplished.”
The Colorado Option was developed by the Division of Insurance together with community members and consumer advocates. It is designed so individuals and small businesses can compare plans easily among different insurers. All essential health benefits required under the Affordable Care Act are included, with many services—such as primary care visits and mental health office visits—covered at no cost to consumers.
Further details about this research can be found here.
