Can Public Option Plans Improve Affordability? Insights From Colorado

Insurance premiums are high and variable—having increased 121 percent since 2004—in part due to limited competition among both providers and insurers. At the same time, increases in out-of-pocket spending and slower wage growth have placed further strain on household budgets and government finances. For individuals without employer-sponsored insurance or who do not qualify for Medicare or Medicaid, the Affordable Care Act (ACA) exchanges provide a critical coverage option, offering income-based subsidies to help reduce premium costs.

However, with the potential expiration of the expanded subsidies under the IRA, many low-income individuals ineligible for Medicaid could face significantly higher premiums, further exacerbating affordability challenges and potentially leading to an increase in individuals without insurance. In addition, ACA...