The ColoHealth Health & Wealth Newsletter
May 2025
Vol. 28, Issue 5

Is the Colorado Public Option Really Saving People Money?

When Colorado lawmakers rolled out the Colorado Public Option, their stated goals sounded attractive.

At first glance, anyway: Lower premiums. More competition. Better access.

Who could be against it, right?

But two years in, the results are more complicated — and for many Coloradans, more disappointing — than expected.

In this article, we’ll break down what the Colorado Public Option is, what it was meant to do, what’s actually happening now, and suggest some better options for you.

What is the Colorado Public Option?

First passed in 2021 and made available in 2023, the Colorado Public Option was pitched as a way to reduce healthcare costs for individuals and small businesses.

Public Option plans are available on the ACA Marketplace. They look similar to other plans, but with one big difference: the state dictates how much insurers can charge and how much they can pay hospitals and doctors.

Every carrier that wanted to sell individual and family health insurance in Colorado was required to offer a so-called “public option,” and work under strict price controls.

The state set aggressive targets: a 5% reduction in premiums every year for three years. The idea was to force insurers and hospitals to lower their prices through state mandates and reimbursement cuts.

The idea was that if you squeeze down the price, everyone benefits.

And so the Colorado Public Option Authority – the state bureaucracy established by Governor Polis to oversee the Public Option – set about establishing health care price controls.

With predictable results.

What Were the Promises?

The Public Option’s backers promised the following benefits:

Reduce insurance premiums for individuals and small businesses
Encourage competition, lowering costs across the board
Expand access to care by making coverage more affordable
Pressure all private insurers to cut prices and improve efficiency

Those are some big promises. But did they work out? Let’s take a closer look.

Are Premiums Really Lower?

In a few cases, yes — but the reality is mixed.

A few Public Option plans are slightly cheaper, – mostly in big cities like Denver, Boulder, and Colorado Springs.

But in many parts of the state, premiums are still going up, even with state-imposed price controls.

Why? Because providers and insurers are pulling back. Some health insurance companies have exited counties altogether, refusing to offer Public Option plans where they can’t make the math work. A couple of carriers, such as Oscar Health, pulled out of the state altogether, while Cigna withdrew from the small business market, reducing competition.

Rural Hospitals Paying the Price

This is especially true in rural areas, where hospitals are already under financial pressure.

Doctors, hospitals, and other providers have refused to join these discounted networks, since the Public Options’ low reimbursement rates make it difficult or impossible for most practices to operate at a profit.

As a result, we’re seeing fewer providers in-network, longer appointment wait times, and more difficulty accessing specialists.

And when fewer doctors accept your plan, you may be stuck going out-of-network, which can mean big out-of-network fees.

The Hidden Cost of Price Controls

Premiums are only one piece of the puzzle. Even with a lower monthly premium, a public option plan could still leave you with:

High deductibles
Expensive out-of-network charges
Longer appointment wait times
Higher “facility fees” from hospitals trying to recoup revenue losses from lower reimbursement rates

So, are you really saving money?

At the end of the day, most people aren’t saving by choosing the public option over better health plans.

Money-Saving Alternatives to the Public Option

If you’re frustrated with rising premiums or shrinking provider networks, you’re not alone.

Fortunately, there are real alternatives:

Health Sharing Plans

These aren’t insurance — they’re community-based programs where members share medical costs.

Benefits of health sharing include:

Lower monthly costs (often 30–50% less than traditional insurance), before ACA subsidies
More freedom to choose your doctor or hospital
Transparent pricing and no network restrictions

Health sharing is especially attractive for healthy individuals and families who don’t qualify for an ACA subsidy, but want protection in case of a serious medical event.

Direct Primary Care + Catastrophic Insurance

DPC offers unlimited access to a personal doctor for a flat monthly fee — typically under $100.

Pair it with a low-cost catastrophic plan or a health sharing plan, and you can:

Eliminate co-pays and per-visit charges
Get same-day or next-day appointments
Save thousands annually on routine care

Final Thoughts

The idea sounded good, but so far, the Colorado Public Option hasn’t delivered on its promises.

Premiums aren’t dropping the way they were supposed to.
Many providers are opting out, leaving consumers with fewer choices.
And for many Coloradans, the costs are simply shifting, not disappearing.

If you do ever want to review your current plan compared to other options, Just call or email your ColoHealth Personal Benefits Manager. They can help you make sure you’re in the best possible health plan that suits your needs and budget.

And for a few people, a Colorado Public Option plan will make the most sense.

To Your Health and Wealth,

signature-wiley

Wiley P. Long III
President- ColoHealth

The ColoHealth Health & Wealth Newsletter is published monthly and emailed to subscribers at no charge. Subscribe now to stay on top of the critical information you need to know about health insurance, healthshare plans and managing your finances to achieve financial security.