House Approves Bipartisan Reinsurance Bill to Help Lower the Cost of Health Care

Reinsurance is a proven approach to helping cut health care costs

(Apr. 5) – The House gave preliminary approval via a voice vote for two bills to help lower the cost of health care and rural EMTs.

Coloradans on the individual market are struggling to keep up with the out-of-control costs of health care, particularly in rural areas of the state. By establishing a reinsurance program Colorado can stabilize the individual marketplace, increase health insurance participation and share the risks more broadly.

“We’ve already seen in a recent report that reinsurance will work to lower the cost of health insurance premiums, especially on the Western Slope,” said Rep. Julie McCluskie, D-Dillon. “This will have a meaningful reduction in health insurance rates on the individual market across the state. We don’t have any more time to waste. People are deciding between paying their mortgage and their health insurance right now. We’ve worked closely with our hospitals, insurance companies, providers and other stakeholders to deliver a program that will finally do what it’s intended to do — save Coloradans money on their health care.”

Rising health care costs are driven in part by the underlying cost of care but are exacerbated by an insurance market that assigns the highest risks and highest costs to the individual market. This is particularly the case on the Western Slope and in rural Colorado, causing families and individuals to forgo health insurance coverage and putting them at major risk of medical debt if emergencies arise.

Rep. McCluskie introduced the bipartisan bill in the House with Rep. Janice Rich, R-Grand Junction. Sen. Kerry Donovan, D-Vail, and Sen. Bob Rankin, R-Carbondale, are the Senate sponsors.

Recently, the Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), released an actuarial study on the reinsurance program. The Colorado Reinsurance Program Analysis looked at multiple scenarios that showed the expected reductions to the costs of medical claims through Medicare-reference-based pricing. These reduced costs lead to a statewide decrease in individual health insurance premiums of nearly 23 percent, or approximately $250,000,000.  

This bipartisan bill aims to reduce insurance premiums for individuals and families by January 2020 to provide much-needed relief to Coloradans, many of whom are paying up to a third of their income on monthly premiums. Our state, especially the Western Slope, has some of the highest health insurance costs in the country.

The bill will establish three tiers, from the highest cost areas of the state to the lowest cost areas, in order to pass savings on to Coloradans. The first tier, consisting of regions in the state with the highest costs, will experience the greatest reduction in premiums, by 30 to 35 percent. The second tier will experience reductions in premiums by 20 to 25 percent. Finally, the third tier, regions with the lowest costs, will experience reductions in premiums by 15 to 20 percent.

HB19-1168 will receive a final vote at a later date.  The House also approved SB19-052, sponsored by Rep. Kyle Mullica. This bill would allow EMS workers to work under the medical supervision of a licensed physician, physician assistant, advanced practice nurse, or registered nurse at a clinic or health facility.

“SB 052 will allow for more EMTs to come into health care facilities and clinics to help care for these patients. This will allow rural clinics and cities that have hard-to-get-to facilities to tend to more patients,” said Rep. Mullica, D-Northglenn. “Currently patients end up suffering because they have to drive further for care because clinics are closing down in their area.”

SB19-052 will receive a final vote at a later date.

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