New health benefit mandates would get more scrutiny under proposed law

In recent years, Colorado Gov. Jared Polis has expressed concerns that state legislation requiring health insurance carriers to provide new benefits could drive up the cost of care. For example, Polis signed a 2021 law that forced state-regulated insurance plans to provide alternatives to prescription opioids, but with the caveat that lawmakers should develop a “uniform, evidence based process” to determine the costs and benefits of future health insurance mandates.

Now, lawmakers appear to have answered the governor’s call with the bipartisan Senate Bill 22-40, which passed in the Colorado Senate on Tuesday. The bill would require the state’s Division of Insurance to retain a contractor that would perform up to six actuarial reviews per year of proposed laws that would impose new health benefit mandates on insurers. These reviews would involve an economic analysis predicting how the new mandates could affect insurance premiums for Coloradans on various health plans.

Spearheading SB-40 are Sens. Jim Smallwood, a Parker Republican, and Faith Winter, a Westminster Democrat, along with Reps. Perry Will, a New Castle Republican, and Susan Lontine, a Democrat from Denver.

Under SB-40, the actuarial reviews required for proposed new health benefit mandates would have to include:

• An estimate of the number of Colorado residents who would be directly affected by the proposed law
• Estimated changes in the utilization rates for specific health care services that could result from the proposed law
• Estimated changes in consumer cost sharing that would result from the proposed law
• Estimated premium changes for covered people or employers enrolled in health benefit plans sold on the individual, small-group and large-group markets
• Estimated out-of-pocket cost changes in state employee group benefit plans, Medicaid plans, and small, medium and large employers
• An estimate of the potential long-term cost changes associated with the new health insurance mandate
• How the proposed law could help improve people’s health
• Social and economic impacts of the proposed law

“This bill basically encourages us to do actuarial studies when we start working on health insurance issues, because sometimes, the best of intentions increase premiums,” Winter said on the Senate floor Monday. “We have to make those policy decisions in the best way possible, understanding the benefits and the costs, and this bill will help us get to that point.”

The Senate voted unanimously Tuesday to pass SB-40, sending the bill to the House for consideration. Outside the Capitol, the bill has support from Denver Health, the Colorado Hospital Association and progressive advocacy group Healthier Colorado.

It’s opposed by the American Physical Therapy Association’s Colorado chapter and AARP.

The latest version of the bill would provide $100,000 to the Division of Insurance to manage the actuarial review process and authorize the division to accept additional gifts, grants and donations to help cover the costs.

Despite Polis’ warning about health benefit mandates, lawmakers this session brought at least one bill that would impose new requirements on health insurance carriers. That is House Bill 22-1094, sponsored by Reps. Brianna Titone of Arvada and Naquetta Ricks of Aurora, along with Sen. Rhonda Fields of Aurora, all Democrats, which would impose new financial requirements on the state’s Medicaid program. The bill would make a survivor of torture who was receiving rehabilitative services in Colorado eligible for state medical assistance regardless of whether they met federal Medicaid requirements.

Members of the House Health and Insurance Committee approved HB-1094 on Feb. 16, sending it to the House Appropriations Committee. As of Tuesday, it had not been scheduled for an Appropriations Committee hearing.