Gov. Jared Polis supports bill to cap what Colorado hospitals can charge certain insurers

CBS News

05-02-2025

As health care costs continue to rise in Colorado, Gov. Jared Polis and some state lawmakers are taking aim at hospitals. They want to cap what hospitals can charge some insurers.
As health care costs continue to rise in Colorado, Gov. Jared Polis and some state lawmakers are taking aim at hospitals. They want to cap what hospitals can charge some insurers.
Coloradans saw health insurance premiums jump by nearly 10% last year and hospitals make up about half the cost of those plans.
Over the last 10 years, their net revenue has doubled to nearly $22 billion, while community health clinics are in danger of closing.
Polis says it's time to share the wealth.
"I wish the highly profitable hospitals would look at this more holistically," he said.
He's backing a bill that would cap what hospitals can charge the state employee health plan and small group market at about one-and-a-half times what Medicare pays. The savings would go to keep safety net providers afloat.
"We want to make sure that they stay open, that providers are providing health care to people that look like them," said state Sen. Iman Jodeh, one of the bill's sponsors.
Small rural hospitals, outpatient behavioral health services and primary care services would be exempt from the price cap, which would kick in in 2027.
State Rep. Kyle Brown, the former Deputy Insurance Commissioner, says right now, hospitals charge commercial carriers nearly three times what Medicare pays for the same care.
"We cannot continue to pay in excess of what is fair," he said.
Julie Lonborg, Senior Vice President of the Colorado Hospital Association, says Medicare covers about 73% on-average of what it costs to provide care.
"It's rate setting on hospitals and that's a problem," she said.
She says 56% of hospitals are in the red and will need to make up the lost revenue somewhere.
"The onus of this will be placed largely on large businesses, large business employers whose costs for health care and premiums for health care will go up because costs will be shifted."
State Sen. Jeff Bridges says hospitals will still make a profit under the bill.
"They can say whatever they want about their bottom line and the challenges they're facing. The reality is they know that these other folks in the health care world are facing even greater challenges," he said.
Lt. Gov. Diane Primavera, who heads-up the Office of Saving People Money on Health Care, says everyone has to do their part.
"We've turned over every rock, pulled every lever we can. It's not just trying to go after the hospital," she said.
The bill is expected save the state $50-$60 million a year while cutting hospital profit margins by half a percentage point.
"A half a percentage point on a hospital that's not making any money right now could be catastrophic," said Lonborg.
Polis says it will be worse if community health clinics close.
"If we don't get the preventative treatment, early diagnosis to those who are underinsured, on Medicaid, uninsured, through community health clinics like Salud and Clinica, they're going to wind up in emergency rooms. Uncompensated care for the hospitals," the governor said.
Lonborg says hospitals are also concerned about community health clinics, but she says a price cap isn't the answer. The hospital association plans to send lawmakers and the governor its own ideas for how to cut costs.