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Sharf: Polis call for insurance mandate scrutiny a welcome change

In the course of the coronavirus crisis, Governor Polis has made both good and poor decisions. When he asked for ideas on regulations that could be suspended in the interests of public health and the economy, that was a good decision. When he asked municipalities to suspend plastic bag bans and taxes, that was a superb decision. When he had Attorney General Phil Weiser issue a cease and desist order to Hobby Lobby days before telling people to wear cloth masks in public, that was a poor decision.

One of his better decisions has been to ask the Democrat-controlled General Assembly to hold off on increasing the cost of health insurance, after signing House Bill 20-1158, unfortunately.

As the Gazette reported, “The measure was a controversial one during the first half of the 2020 session, but Polis said it’s the last bill he’ll sign that could increase the cost of health insurance, unless sponsors can prove the measures will save money rather than raise premium costs, or if they can make the case it will help with the COVID-19 pandemic.”

Better than that, this isn’t just a temporary request. Polis would like to see a permanent mechanism for doing actuarial analyses of future benefit mandates, something Democrats have traditionally resisted. This would mean that in addition to the typical Legislative Council fiscal note that assesses the effect on the state’s expenditures and tax revenue, the Division of Insurance would be charged with estimating the costs, effect on insurance rates, and the number of patients actually helped by any new mandate.

Even as recently as last week, such a request didn’t seem necessary. With the coronavirus restrictions likely to significantly shorten the legislative session, there was an excellent possibility that only the budget and the absolute highest-priority bills would have been considered. Now that the Colorado Supreme Court has ruled the state constitution to be, shall we say, flexible in its black-letter rules, we will likely end up with a complete 120-day session and thus plenty of time to consider these bills.

In 2010, the Council for Affordable Health Insurance surveyed state benefit mandates nationally, estimating the percentage that each one added to the overall cost of insurance. At the time, Colorado’s benefits added up from somewhere between 15-30% of the total insurance bill. Since then, periodic Legislative Council review of Colorado’s mandates, most recently updated in March of this year, shows that the number of mandates has only grown.

While there is as yet little hope of doing a retrospective analysis of existing mandates, giving a reality check to any new proposed requirements would be a big step forward.

At a time when so many government actions, at the state and local levels, have become increasingly restrictive, and irrationally so, it’s good to see Polis in this instance take a step back from that.

Now, for the next step. Having recognized the inherent value of a cost-benefit analysis for health insurance benefit mandates, how about we do such a cost-benefit analysis for any new bill, or any new regulation over a certain dollar threshold?

Joshua Sharf is a senior fellow in fiscal policy at the Independence Institute in Denver.

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