Health insurance providers are constantly being pushed to lower health care premiums in Colorado. In fact, they are legally authorized to do so at a 15% discount for Colorado option plans. Yet the 2024 legislative session is already loaded with a slew of bills that take away tools from carriers that reduce unnecessary costs to the health care system, employers and individuals. Your health insurance premium is a direct reflection of provider, hospital and drug costs, and yet the bills introduced so far this legislative session will significantly increase those costs.
Take for example HB24-1149, a bill that would undermine the ability of health insurance providers to contain pharmaceutical costs, even though prescription drug costs account for nearly a quarter of the premium dollar and continue to rise. This bill, among other things, directs health insurance providers to create prior authorization waiver programs for prescription drugs, hampering efforts to ensure that the lowest-cost, safest pharmaceuticals are the first resort for patients .
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Another well-intentioned piece of legislation, SB24-054, would have made carriers cover GLP-1s like Wegovy and Ozempic, the weight-loss drugs that nearly bankrupted North Carolina’s public employee health insurance plan, leading to that plan’s trustees voting to remove their cover. Estimates show the average wholesale price for GLP1 of an individual user over 36 months is $46,000. Whether it was meant to be or not, both policies are a beautifully wrapped gift to the pharmaceutical industry. Coloradans will simply pay more for their health insurance because insurers are required by law to ensure that these costs are reflected in the premium.
Two other bills, HB24-1010 and HB24-1218, would allow providers to essentially set their own rates for drugs and non-emergency ambulance services. At a time of increasing hospital and provider practice consolidation, health insurance providers continue to lose the ability to negotiate the lowest rates to benefit their members, given laws that require carriers to have a certain number of providers in their networks. For example, HB 1010 eliminates a health insurance provider’s ability to use specialty pharmacy negotiations that result in the lowest patient price for certain expensive specialty drugs. Instead, carriers will have to pay the average 23% markups added by providers administering these extremely expensive drugs — that’s after the provider is paid for administering the drug to the patient.
Other bills that will increase your insurance premiums include mandatory coverage of biomarker testing (SB24-124) and arbitration of health insurance claims (SB24-163). These bills are in addition to the many bills passed between 2019 and 2022 that we believe have already increased fully insured premiums in Colorado by a minimum of 5.52% to 7.92% (or $320 million to $405 million annually) .
There are two ways to save people money on health care — reducing the services/products/drugs covered or reducing the prices paid for those services/products/drugs. Unfortunately, policies proposed by the Colorado General Assembly limit insurers’ ability to negotiate lower costs and expand coverage requirements, while messaging such legislation will “save people health care.” On the contrary, the legislation will cause Coloradans to pay more for health care through increased premiums. We hope that Gov. Jared Polis will follow through on his ongoing promise to save people money on health care and demand a deeper look at the cost impact of the General Assembly’s current proposed policies.
Saskia Young is the executive director of the Colorado Association of Health Plans.
