When Colorado’s public health insurance option rolls out on the individual market in a few years, the state won’t be running the plans offered to consumers. Instead, the coverage will be administered by private insurance companies, which also will bear the brunt of the costs, according to initial details of the proposal.

Coloradans who receive coverage under the public option plans could see monthly premiums that are an estimated 9% to 18% cheaper than the projected rates for other commercial plans on the individual market when the program debuts in 2022.

The 196-page draft of the public health insurance option was released Monday afternoon by the state Division of Insurance and the state Department of Health Care Policy and Financing.

Earlier this year, state legislators approved a bill directing the two agencies to come up with a proposal of what a public option could look like in Colorado. The agencies are accepting public comments on the draft until Oct. 25. They have until Nov. 15 to submit a final report to the legislature.

As proposed, the public option plan would also provide pre-deductible coverage for some services, such as primary care. A deductible is an amount a person has to pay before their insurance company will contribute toward health care costs.

This aspect of the plan drew praise from Adela Flores-Brennan, executive director of the Colorado Consumer Health Initiative, who noted that high deductible insurance plans can be unpredictable when it comes to patient out-of-pocket costs.

“It’s making some really good progress toward creating greater certainty for consumers,” she said of the public option draft.

As with plans already on the individual market, under the public option, insurance companies would bear the risk for health expenses, according to the document. The state also would seek a federal waiver to lower costs further or to provide more benefits, such as dental coverage.

The draft proposes that the state would not be required to cover any costs associated with the plans, except those related to staffing at the agencies while they implement and oversee the option. It’s unclear how much that would cost the agencies.

The public insurance option was among the ambitious health legislation state lawmakers considered — and passed — during the 2019 General Assembly. Legislators also approved the creation of a state reinsurance program to help insurers cover their sickest — and most expensive — patients.

“It’s worth taking a step back and realizing that this is a big step and no other state has really done anything quite like this before,” said Joe Hanel, spokesman for the Colorado Health Institute.

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