Health Affairs September 26, 2025
Hospital prices are a primary driver of health care spending growth for the privately insured. Because insurers often lack the bargaining leverage or incentive to negotiate lower prices with hospital systems, some states have turned to regulatory mechanisms to control hospital prices and price growth.
Colorado’s public option—The Colorado Option—introduces a new accountability mechanism that requires insurers to meet premium rate reduction targets, enforced through a public hearing process that can compel hospitals to lower prices. This mechanism can directly reduce prices in Colorado Option plans at hospitals that are required to lower their rates and may also influence prices of non-Colorado Option individual market plans.
In January, we highlighted how Colorado’s public option helped lower premiums for the...
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