Colorado: C4HCO supports HB 24-1258: Credit Covered Person Expenses Insurer Insolvency

via Connect for Health Colorado:

DENVER – Last Thursday, Connect for Health Colorado’s Board of Directors took a support position on House Bill 24-1258 Credit Covered Person Expenses Insurer Insolvency. This bill will require a covered individual’s new health insurance company to credit out-of-pocket expenses paid if their current health insurance company leaves the market mid-plan year and can no longer provide coverage. This bill also provides methods for health insurance companies to recoup any expenses and increase in claims liability because of crediting out-of-pocket expenses. Connect for Health Colorado has released the following statement:

“As the official health insurance marketplace for Coloradans, it’s our mission to increase access, affordability, and choice. HB24-1258 directly furthers that mission for customers needing new coverage in the event of a mid-year market exit, which we’ve seen a couple of times in the past few years. This bill will protect customers’ health and finances as they attain new coverage for their health care needs without worrying about resetting deductibles and out-of-pocket maximums. For those reasons, Connect for Health Colorado supports House Bill 24-1258.”
 
House Bill 24-1258 has passed the House and is currently awaiting debate and vote in the Senate.

Here's the problem: You enroll in a healthcare plan from, Carrier A starting in January with, say, a $5,000 deductible. You use up, say, $2,000 of that deductible in the first few months. That May, Carrier A announces that they're insolvent (or have some other catastrophic business failure requiring them to pull out of your state mid-year...say as of the end of July.

You're now eligible for a Special Enrollment Period to switch your coverage over to Carrier B...except that your deductible has reset back to the full $5,000 under the new carrier, meaning you've effectively just been screwed out of $2,000.

This bill, if passed, would apparently require Carrier B to apply the $2,000 you've already paid towards your old deductible to the new plan, while also having some sort of mechanism for allowing Carrier B to get reimbursed for that $2,000.