RELEASE: Health insurance protections pass first floor vote
FOR IMMEDIATE RELEASE: 4.11.07 CONTACT: Ben Davis 303.522.6790
Measure to prohibit rate increases based on employee health status and claims history passes today DENVER, CO: HB 1335, a measure to alleviate Colorado’s health care crisis, was approved in the first of two votes by the House of Representatives. The measure, sponsored by Representatives Anne McGihon and Tom Massey, will prohibit health insurance companies from rating up customers as a result of their health status or claims history. Under current law, health insurers are able to increase the cost of their premiums for customers with current or past health conditions. "High health insurance rates are a problem throughout Colorado because we are allowing insurance companies to increase their rates based on our health and our claims history." said Representative McGihon. "It’s time we change our health insurance system so that it isn’t only for the healthy." Despite strong opposition from the insurance industry, House members voted for the measure to reduce the challenges that small business owners and health care consumers face when trying to provide coverage for their employees. An additional amendment was offered to delay implementation of the measure until after recommendations from the 208 Commission on Health Care Reform were submitted to lawmakers. The bill sponsors opposed this proposal stating that this measure lays a strong foundation for the recomendations expected later this year. Representatives McGihon and Massey were the sponsors of the legislation that created this commission. In Colorado, the business community is comprised mostly of small firms with 50 or fewer employees. Small business owners are increasingly unable to offer their employees health insurance coverage, faced with rising costs, difficult decisions to either “thin” down insurance coverage or discontinue health insurance coverage altogether. These small businesses have seen their share of health insurance premiums rise 5.5 times more quickly than real earnings – forcing families to reject employer sponsored insurance because it is simply unaffordable. And small businesses pay on average 10% more for health insurance than large firms. "Colorado employer-sponsored health insurance is declining at a greater rate than the national average, and evidence suggests there is a direct correlation between the rising costs of health insurance premiums and a growing number of uninsured Coloradoans," said Representative Massey. "Consider the facts: Colorado is among the highest insurance premium states in the country – even California has lower insurance premium rates." For small businesses and consumers, health insurance premiums become unaffordable when the entire company is rated up because of only one employee by insurance carriers. Insurance carriers are able to apply higher rates to the small business groups because of rate bands that were authorized in 2003 by House Bill 1164, the most discriminatory of the bands are health status and insurance claims experience. Since 2003, insurance carriers have been able to discriminate against small groups by rating up groups whose members have health conditions as minor as allergies or who have accessed the health care system numerous times in the past few years. “There are tough decisions to be made and we all share responsibility for making society work and restoring peace of mind to all Coloradans," AW Schnellbacher AARP Colorado Legislative Coordinator. "It is time for real leadership and real solutions on the issues that matter to Colorado and the American people.” Rate bands such as health status and claims experience not only discriminate against consumers and small businesses they also create high administrative costs for insurance carriers, because it takes a lot of resources to investigate and assess an individuals health history. Rate bands also create a less transparent insurance premium structure. "We know that 63% of our state’s uninsured adults worked in businesses with fewer than 100 employees," said Dede de Percin, Executive Director of the Colorado Consumer Health Initiative. "This measure is a strong first step towards a more inclusive, affordable health care system for working Coloraans. This measure is supported by the Colorado Consumer Health Initiative, AARP, Rocky Mountain Farmer’s Union, National Federation of Independent Business, Service Employees International Union, The Bell Policy Center, Colorado Childrens Campaign, and the Colorado Coalition for the Medically Underserved.