The Colorado Option is a state initiative designed to make health insurance more affordable, easier to understand, and more balanced for individuals, families, and small businesses. Launched in 2023, it requires insurance companies to offer standardized health plans in Colorado’s individual and small-group markets. These plans emphasize predictable costs, lower premiums, and first-dollar coverage for high-value services such as primary care, mental health care, and prenatal and postpartum care. This report presents the state-required evaluation of the Colorado Option’s first two years, examining how the program has been implemented and what it has meant for enrollment, affordability, and closing health gaps across the state.

Using a mixed-methods approach, the evaluation combines analysis of enrollment, premium, and claims data with interviews and focus groups involving consumers, brokers, insurers, hospitals, providers, and state officials. Together, these sources provide a comprehensive picture of how the Colorado Option is functioning in practice and how it is experienced by Coloradans shopping for and using health insurance.

The findings show that the Colorado Option is meeting several of its core goals. Enrollment in Colorado Option plans has grown rapidly since their introduction, particularly in the individual market. By 2024, nearly half of all Marketplace enrollees selected a Colorado Option plan. Consumers reported that standardized benefits and clear plan labeling made it easier to compare options and understand what services were covered and what they would pay when they used care. Brokers and enrollment assisters played a key role in helping consumers navigate choices and understand the value of first-dollar coverage.

Affordability improved in meaningful ways. Colorado Option plans were generally priced competitively compared to other plans, and consumers who enrolled in them paid lower monthly premiums on average. More importantly, enrollees spent about 15 percent less out of pocket each year—roughly $220—than similar consumers in non-Colorado Option plans. These savings reflect plan designs that rely more on predictable copays rather than coinsurance and that cover certain high-value services before the deductible is met.

The program’s approach to cost control—requiring insurers to meet premium reduction targets and encouraging negotiations with hospitals and providers—also appears to be working as intended. Although no formal public hearings were ultimately needed, the possibility of hearings prompted agreements that lowered provider reimbursement rates for Colorado Option plans, contributing to lower premiums.

The evaluation also highlights areas for continued improvement. Awareness and enrollment remain limited in the small-group market, and some consumers still experience confusion about services subject to coinsurance, such as laboratory tests. Gaps remain in data and training that limit the ability to fully measure progress for all communities.

Overall, the Colorado Option represents a significant state-led effort to address rising healthcare costs while simplifying choices and reducing financial barriers to care. Early evidence suggests that it is improving affordability and consumer experience, while laying groundwork for longer-term progress toward greater access to health coverage in Colorado.