When Friday Health Plans went belly up in August last year, it didn’t just leave 30,000 Coloradans without health insurance.

Most of those former clients, largely in the individual market, found themselves facing the prospect that they’d have to start over with a new health insurance company mid-year and pay a new round of deductibles in the months to come.

Officials urged health insurers to honor those out-of-pocket and deductibles and not require their new clients to pay them twice in a calendar year.

Kaiser Permanente and Denver Health both agreed to do so, but most health insurers did not.

And while Kaiser and Denver Health stepped up, they serve primarily urban areas – and not the rural communities served by Friday Health. In 2021, the Friday Health plan was available in 36 counties, including 24 counties in Eastern and Southeastern Colorado and the San Luis Valley. 

On Wednesday, the House Health & Human Services Committee advanced a bill that could save future consumers thousands of dollars and avoid the headache of double-paying out-of-pocket and deductible costs.

Rep. Kyle Brown, a Louisville Democrat, said deductibles can exceed $8,000 and out-of-pocket maximums can be as high as $10,000. Patients with long-term health issues can easily reach those maximum costs in a year, he said.

Sponsors said House Bill 1258 addresses the rare instances when a health insurer becomes insolvent and leaves the state during the plan year.

Three other health insurers left Colorado in 2022, but the three – Humana, Oscar and Bright Health – all completed their plan years. Oscar and Bright Health operated in the small group and individual market; Humana operated in the small group market.

HB 1258 requires health insurers to provide a credit on deductibles and copays to consumers signing up for new health plans after their previous insurers shut down.

In order to deal with the added costs for the new insurer, the new plan is only required to credit what consumers have spent and as reported by the previous health plan, its conservatorship or the division of insurance.

Health insurers can also file claims against the estate of the previous insurer for those costs, or file for a surcharge for those costs in their rate filings with the Division of Insurance.

Brown told Colorado Politics that in the rare case when an insurer does not believe it can cover those costs, it may be able to get a waiver from the Commissioner of Insurance.

HB 1258 was amended with a “strike below” amendment that replaced the original bill.

Republicans on the committee raised objections, saying they had not been given sufficient time to review it.

The bill passed on an 9-4 party-line vote and now heads to the House Appropriations Committee.