FAIR Healthcare Bill and Insurance Accountability Act Go to Governor

(Denver)  Two major pieces of health insurance reform overcame fierce resistance and passed through the legislature in its final hours today.

Legislators supported the FAIR Act (Fair & Accountable Insurance Rates) which aims to drive down health insurance companies’ rising rates.  The final version of the bill passed out of the House on a 42-22 vote and now awaits the Governor’s signature.

The bill, sponsored by Representative Morgan Carroll (D-Aurora) and Senator Paula Sandoval (Denver,) will empower Colorado’s Insurance Commissioner to watchdog proposed insurance rate increases.  Insurers will be required to justify rate increases before they can take effect.

In explaining House Bill 1389, Rep. Carroll said: “If it seems like we are paying more for less, it’s because we are.  Consumers are unhappy with ever-increasing rates and ever-declining coverage. The FAIR Act begins to address that by making sure that our health care is the insurance industries’ bottom line.”

“The implications of over-priced health care are obvious: The primary reason people go uninsured or that businesses drop health insurance coverage is because premiums are not affordable,”  Said Rep. Carroll. “Yet, Colorado law does not require insurance companies to justify their rate increases before they take effect.  That means there is no meaningful oversight on insurance rates in Colorado.  There is not real competition in the market to drive down prices.”

“The FAIR Act creates a watch-dog over the insurance industry to work on behalf of families and businesses.  When rates do go up, we will track the reasons why and make that information available to the public.  We will track how much of premium dollars go to actual benefits in what is called a benefits ratio.  This kind of law enabled California to save consumers $700 million last year because the insurance rates were found to be excessive and unjustified by the Insurance Commissioner.”

38 other states require prior review before insurance rate hikes can take effect. 

"Expensive coverage equals no coverage for many Colorado families and businesses. Insurance rates are out of control, driving up the number of uninsured and increasing costs for everyone," said Rep. Carroll.  "Coloradans have been paying more for less every year. It's time to challenge unjustified rate increases.  Our health should be their bottom line."

House Bill 1407, known as the Insurance Accountability Act, also passed today on a 43-20 vote and now heads to the Governor for his signature.  The legislation sponsored by House Speaker Andrew Romanoff and Senate Majority Leader Ken Gordon makes the insurance industry pay what they owe, when they owe it. 

The Insurance Accountability Act will strengthen consumer protection.  Insurance companies that unreasonably delay or deny benefit payments will face stiffer penalties.

-- Posted by staff