Health insurance reform signed into law: Measure to prohibit rate increases based on employee health status and claims history signed by Governor Ritter
FOR IMMEDIATE RELEASE:
6.1.07
CONTACT:
Ben Davis
303.522.6790
DENVER, CO: HB 1355, a measure to alleviate Colorado’s health care crisis, was signed into law by Governor Ritter today.
The new law, sponsored by Representative McGihon (D-Denver) and Senator Hagedorn (D-Aurora), will prohibit health insurance companies from rating up customers as a result of their health status or claims history. Health insurers are no longer able to increase the cost of their premiums for customers with current or past health conditions.
Despite strong opposition from the insurance industry, lawmakers approved the measure to reduce the challenges that small business owners and health care consumers face when trying to provide coverage for their employees.
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 Dede de Percin, Executive Director of the Colorado Consumer Health Initiative. "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. 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 de Percin. "This measure is a strong first step towards a more inclusive, affordable health care system for working Coloradans."
Governor Ritter’s support for HB-1355 is strongly 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.
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