The Colorado Springs Gazette final

Health insurance company to leave state

BY MARIANNE GOODLAND marianne.goodland@coloradopolitics.com

Friday Health Plans will become the fourth health insurance company to pull out of the Colorado market in the past year, according to an announcement Thursday from the Colorado Division of Insurance.

Friday’s departure is in addition to Humana, which covered about 155,000 members; Bright Health, which covered about 30,000 members; and, Oscar Health, which covered 3,800 members. All three companies announced in 2022 they, too, would leave the Colorado market.

Three of the plans operated in the small group and individual markets. Humana operated only in the small business market.

Friday enrolled about 30,000 Coloradans in its HMO plans, mostly in the individual market.

The company, which had 230,000 enrollees in Texas, was placed into receivership in that state in March and its assets put up for liquidation.

About 203,000 Coloradans are enrolled in health plans in the individual market. Another 220,000 are enrolled in the small group market, which is for companies with up to 100 employees.

The insurance division said Thursday that Friday Health’s problems are financial and nationwide.

“Friday’s problems are national — the company’s aggressive growth in other states around the country got ahead of their

financing,” the division announcement said. “While Friday Health Plan of Colorado has maintained the capital required by Colorado law, the problems in other states and with the parent company are now impacting the company here.”

The division halted enrollment in Friday plans last month.

Critics of the Colorado Option, the state-designed health insurance plan, have claimed mandates imposed on health insurers are forcing some out of the Colorado market. That’s disputed by Commissioner of Insurance Michael Conway, who has said that the plans leaving Colorado have done so based on national issues and not due to the Colorado Option.

But the departure of so many plans in the past year prompted lawmakers to make changes to the state insurance guaranty association, known as the “Colorado Life and Health Protection Association,” a nonprofit statutory entity. Under House Bill 1303, the association would add protection for providers and consumers enrolled in HMOS, such as Friday, up to a statutory cap of $500,000 for each insured entity.

HB 1303 was sponsored by Rep. Kyle Brown, a Louisville Democrat who helped design the Colorado Option while he was deputy commissioner of the Division of Insurance, and Speaker Julie Mccluskie, D-dillon, whose district includes the Peak Health Alliance.

Bright Health had been the sole carrier for Peak and its decision to pull out of Colorado meant Peak had no health plans in 2023. Peak began offering Bright plans in 2020 in Summit County and expanded to seven other Western Slope counties.

Bright was fined $1 million in April 2022 for operational issues by the Division of Insurance, including for 100 consumer and health care provider complaints in 2021 and 2022. The company announced in October it was leaving the market in nine states, including Colorado.

The complaints included failure to pay provider claims according to Colorado law, failure to communicate with members, inability to accurately process consumer payments and accounts, and untimely processing of claims for physical and behavioral health coverage.

In 2024, Elevate, the health plan offered by Denver Health, will start offering insurance for Peak consumers.

Friday’s failure was hinted at during testimony on HB 1303 in April. Greg McCarthy, the CEO of Denver Health Medical Plan, told the House Public and Behavioral Health & Human Services Committee that two carriers are in danger of failing and becoming insolvent. He didn’t identify them but said DHMP has a receivable on its books of $20 million in risk-adjustment transfers due from the two carriers cited as being at financial risk.

Adam Fox at the Colorado Consumer Health Initiative also pointed to potential risks for “one or two” health insurance companies and their situations in other states that could jeopardize health care access in Colorado, which he said pointed to the need for the legislation. Gov. Jared Polis signed HB 1303 on May 15.

One insurer’s “profit-seeking or poor financial management should not put other insurance companies at jeopardy or create further instability in the market,” Fox told the committee.

Fox said a certain level of instability in insurance markets always exists, which is why the guaranty association was set up. Some insurers aggressively enter a market and underprice their products, which puts them at risk, he explained.

Rep. Richard Holtorf, R-AKron, called the instability in the market “a storm on the horizon.”

Conway identified Bright and Friday as the companies at risk, although Bright had already announced six months earlier it was leaving the state.

The failures could have short-term impacts on insurance rates, Conway said. He indicated rural health care could have taken a much bigger hit without the backstop provided in HB 1303.

If doctors or hospitals are carrying the load for not getting paid, they will increase what they charge insurance companies, and that will affect rates, Conway added.

LOCAL & STATE

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2023-06-03T07:00:00.0000000Z

2023-06-03T07:00:00.0000000Z

https://daily.gazette.com/article/281741273808381

The Gazette, Colorado Springs