Colorado Hospital Association Reacts to Reinsurance Analysis

GREENWOOD VILLAGE, COLO. – March 22, 2019 – CHA applauds the Division of Insurance for investing the time and resources to obtain the actuarial analysis for HB 19-1168. While the report sheds light on some aspects of this proposal there are still many unanswered questions and fundamental flaws in this bill.

“For the first time ever, the beneficiary of an insurance policy, which in this case is the insurance

companies, does not have to pay a premium for the policy,” said Katherine Mulready, CHA chief strategy officer. “The reality is this bill is untested and unfair given insurance companies have no skin in this game. And, this bill doesn’t require payers to pass on their savings to consumers.”

What else is wrong with this bill?

  • It’s unfair.
    It puts 100 percent of the cost burden on providers. For the first time ever, it provides insurance without asking the beneficiaries to pay their own premiums.
  • It’s untested.
    Rate setting in a portion of the commercial market has never been successfully attempted before – in Colorado or any other state.
  • It’s unlikely to be approved.
    In order to reduce premiums, the state needs approval from the Trump administration, which is highly unlikely given the policy and politics of this bill.
  • It’s full of unintended consequences.
    Rate setting only creates more distortions in an already distorted market; exemptions for certain services or providers will only make this worse.

Under this plan, cuts to insurance rates mean cuts to doctors and hospitals. And those cuts will have consequences. Losses will be made up by shifting costs to other employers, and services may be cut in communities already struggling.

There are other funding options, including one proposed by opponents, that will achieve the same level of savings without the flaws already described.

CHA urges the legislature to carefully consider the alternate model that has been proposed. There is time to do reinsurance right, which means sharing responsibility for fixing this problem. Colorado’s patients deserve that.

About Colorado Hospital Association

Colorado Hospital Association (CHA) is the leading voice of Colorado’s hospital and health system community. Representing more than 100 member hospitals and health systems throughout the state, CHA serves as a trusted, credible and reliable resource on health issues, hospital data and trends for its members, media, policymakers and the general public. Through CHA, Colorado’s hospitals and health systems work together in their shared commitment to improve health and health care in Colorado. Learn more at