Colorado Plan Shows the Coercion Behind the Public “Option”

Former Vice President Joe Biden’s political comeback prompted health care stocks to surge last month following the Super Tuesday primaries. The rally, which occurred before the coronavirus pandemic took hold in the United States, stemmed in large part from Wall Street’s belief that Biden represents less of a threat to the sector as a potential president than Vermont Sen. Bernie Sanders’ single-payer health-care system.

But anyone who considers Biden’s alternative to single payer, the so-called “public option,” innocuous should look to Colorado. Lawmakers in the Centennial State recently revealed their version of the concept, and it represents an “option” in name only. Indeed, the state’s plan contemplates a level of coercion that in some respects exceeds that of Sanders’ system of socialized medicine.

Big Government Forces Hospitals’ Participation

For starters, the legislative proposal dictates prices for hospitals, based on a percentage of Medicare rates. As one might expect, the bill’s supporters believe the rates proposed in the legislation represent fair reimbursement levels, while some hospital executives disagree.

But the bill would also take away hospitals’ negotiating leverage, by requiring all Colorado facilities to participate in the new insurance offering. Hospitals refusing to participate would face fines of up to $40,000 per day. And if the prospect of nearly $1.5 million in government-imposed sanctions does not force a recalcitrant facility into submission, the bill also permits Colorado’s insurance commissioner to “suspend, revoke, or impose conditions on the hospital’s license.”

Think about that for a moment: The government forces hospitals to offer patients a service—even if the government’s price for that service could lead them to incur financial losses—and threatens to take away their license to do business if they refuse. That level of heavy-handed government involvement far exceeds the individual mandate in Obamacare.

Insurers Required to Participate, Too

The bill similarly requires all Colorado insurers to offer the new government-dictated “option” in each county in which they offer Obamacare exchange products. In counties where only one insurer currently offers coverage, the bill directs the insurance commissioner to “require carriers to offer the Colorado option in specific counties,” such that at least two carriers offer the plan in every county.

According to one report, the bill’s sponsors called their new offering the “Colorado option” rather than the “public option” because lawmakers did “not want to put the state budget at risk by creating a government-run insurance company.” Instead, lawmakers want to dragoon insurers into assuming that risk, even as the bill prohibits efforts by insurers to absorb potential losses from the “Colorado option” by raising rates elsewhere.

Worse Than Berniecare?

Sanders’ legislation would effectively put private insurers out of business, by making coverage for services covered by the single-payer system “unlawful.” The issue of whether to ban private insurance, and take away individuals’ ability to keep their current coverage, became a defining characteristic of Democrats’ nominating contest.

But the Colorado legislation could put private insurers and hospitals out of business, if they refuse the state’s commands. At least Sanders’ proposal allows hospitals to opt out of the government system if they decide—few would, but they do have that choice.

The Colorado legislation shows how Obamacare set a dangerous precedent, which Democrats want to extend throughout the health-care system. Just as Obamacare forced all Americans to buy a product for the first time ever, now lawmakers want to force hospitals and insurers to treat patients, even at their financial peril. Each could face a Hobson’s choice: Putting themselves out of business by incurring losses on “Colorado option” patients, or taking the “option” to decline to participate, at which point the state will regulate them out of business.

Colorado’s proposal of dubious merit and equally dubious constitutionality demonstrates the way in which even purported moderates like Biden have embraced a health-care agenda defined by ever-increasing levels of government intrusion and coercion. At present, Sanders’ single-payer legislation represents the far end of that continuum, but liberals will use proposals like Colorado’s “public option” to get there.

This post was originally published at The Federalist.