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February 14, 2024

Bill Will Protect Coloradans from Health Care Insurer Insolvency

DENVER, CO –  The House Health and Human Services Committee today passed legislation to ensure that Coloradans who reached their health care deductible and out-of-pocket maximums are credited by their new insurer if their old insurer goes out of business. HB24-1258 comes as a direct response to the recent Friday Health insurer shutdown and aims to protect and save Coloradans money by not requiring them to pay their health insurance deductibles twice. 

“When Friday Health closed their doors in Colorado, it left many patients uninsured, frustrated and concerned about the money they already spent reaching their health care deductible,” said Rep. Kyle Brown, D-Louisville. “This legislation protects Coloradans if their health care insurer files for bankruptcy by allowing them to credit any out-of-pocket maximums and deductibles toward their new insurer. No one should have to pay their deductible twice, and this legislation saves Coloradans money and honors what they’ve already paid toward their medical expenses.” 

“In the rare instances when someone loses health insurance because their insurer goes bankrupt, there must be protections in place to ensure they don’t have to pay their deductible twice,” said Rep. Andrew Boesenecker, D-Fort Collins. “It’s important to remove unnecessary barriers to receiving health care coverage, and this legislation makes sure insurance companies honor previously paid out-of-pocket maximums and deductibles. This bill will save Coloradans money on health care, protect them from insurer insolvency and make it easier for them to receive the care they need, when they need it.” 

HB24-1258 is a direct response to the Friday Health insurer Colorado shutdown over the summer which left more than 30,000 Coloradans uninsured and without the benefit of deductibles they had already paid. HB24-1258 passed by a vote of 9-4. This legislation would save Coloradans money on health insurance by not requiring them to pay their deductibles or out-of-pocket maximums twice if their insurer files for bankruptcy. Specifically, Coloradans would be able credit all out-of-pocket expenses and deductibles paid to a previous, out of business insurer to their new health insurer with a new benefit plan. 

This bill also defines ‘out-of-pocket expenses’ as any expenses paid by a covered person for medical services and prescription drugs including coinsurance amounts. The goal of HB24-1258 is to protect Coloradans from health care insurer insolvency and to ensure that patients can receive the critical and expected health care coverage they need. 

On August 10, 2023, Colorado Democrats led by Representatives Boesenecker and Daugherty, sent a letter to Colorado’s health insurance carriers urging them to honor former Friday Health Plan enrollees’ payments toward their deductibles and out-of-pocket maximums.

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