Nov 28, 2022 - News

How Colorado uses incentives to lower employee health care costs

Illustration of a hundred dollar bill puzzle with pieces missing out of the center in the shape of a red cross

Illustration: Sarah Grillo/Axios

Some employees for the state of Colorado could see money in their pockets if they choose lower-cost, higher-quality health care providers.

Why it matters: It's a model the state says helps its employees get better coverage. The incentives defer costs, and are meant to encourage employees to obtain the best available plan, Kaiser Health News reports.

Catch up quick: This summer, the state joined the Colorado Purchasing Alliance, which provides access to tools like the Healthcare Bluebook, an online system that ranks health providers by cost and quality.

  • Other Colorado Purchasing Alliance members include the City and County of Denver and the University of Colorado Health and Welfare Trust. The state is one of 12 employers to join so far, and will be first to use the newly negotiated rates and incentives.

How it works: Joining the alliance means the state and other employers negotiate prices with insurance companies β€” as opposed to a standard system in which employers outsource this work, the Colorado Sun reports.

By the numbers: The checks in the mail for a portion of employees' savings range from under $50 up to thousands of dollars for surgery.

  • The money can help offset copays or deductibles, but in some instances, like preventative procedures where there is no copay, it can put extra cash directly in employees' pockets.

Yes, but: Only employees who pick the state's plan, administered by Cigna, are eligible.

What they're saying: "Being able to share information in terms of how you can shop for health care and that not everyone is charging the same price for everything ... has been eye-opening," Jennifer Whitener, benefits manager for Larimer County, which uses the Healthcare Bluebook, told Kaiser Health News.


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