Colorado: NAMIC to be Actively Involved in Interim Committee to Study Health Insurance, Special Joint Committee to Consider Issues Relating to Colorado’s Auto Insurance System

The President of the Senate and the Speaker of the House signed SJR 36, Interim Committee to Study Health Insurance, on May 20 and May 23. The Resolution creates a legislative committee empowered to meet during the interim after the first regular session of the 65th General Assembly to study health insurance issues affecting the citizens of Colorado. Because certain members of the legislature repeatedly attempted, but failed, to ban the use of credit scoring in three different bills (HB 1031, SB 5, and SB 195), the insurance industry is concerned about a reference to the use of credit scoring in a health insurance related study. The resolution states, “ [t]he use of credit scoring for insurance underwriting purposes has been a controversial issue, and careful study is needed to determine whether a credit score is predictive of insurance losses.”

The resolution states that the committee shall review health insurance issues that affect the citizens of Colorado, which issues include, but are not limited to, the following:

(a) Issues surrounding network adequacy, including practice by both participating and nonparticipating providers at in-network facilities; workforce training and adequacy; the encouragement of provider competition based on quality; and certificates of need, alignment of needs, and resources in communities;

(b) The use of credit scoring for insurance underwriting purposes;

(d) Rate-setting processes for health care services by third-party carriers, including the use of federal Medicare rates as a benchmark, establishment of rates through negotiations between providers and carriers, the extent to which legal or regulatory standards affect marketplace negotiations, and any other underwriting or accounting practices that might be utilized;

(e) Processes utilized by third-party carriers for determination of covered benefits; preauthorization for services, including medical necessity; retrospective approval or denial of claims; and claims payment practices;

(f) The feasibility of direct contracting between providers and employers; and

(g) A comparison of regulatory requirements between state-regulated health insurance plans and those under the jurisdiction of the federal Department of Labor through the federal Employee Retirement Income Security Act of 1974.

Since an evaluation of credit scoring as an underwriting tool has little, if anything, to do with a study that is designed to investigate the adequacy, sufficiency and availability of health insurance, the reference to credit scoring stands out as being a topic that was “massaged” into the scope of the interim study in an attempt to revive the credit scoring issue for the next legislative session. Consequently, NAMIC, in concert with the insurance industry, will be actively involved in the SJR 36 study so that credit scoring as an underwriting tool will be preserved for the benefit of the insurance consumer.

Additionally, on June 2 and June 7, the Speaker of the House and then the President of the Senate signed HJR 1026, Special Joint Committee to Consider Issues Relating to Colorado’s Auto Insurance System. Pursuant to HJR 1026, the Colorado General Assembly is empowered to set up a special joint committee consisting of Senators and Representatives to be organized for the purpose of receiving information and testimony on the state of the Colorado auto insurance system and gaps in coverage and the delivery and availability of health care for injuries.

The resolution states that the committee is authorized “to study matters relating to the Colorado auto insurance system, particularly the outcome of repealing no-fault auto insurance and replacing it with a tort-based system.” NAMIC will work closely with the insurance industry to assist the committee in procuring, evaluating and disseminating insurance information relevant to the issue at hand.

NAMIC is confident that the facts will speak for themselves and demonstrate that insurance consumers have and will continue to benefit, via more competitive insurance rates, the availability of more insurance products and greater personal control over the coordination of their auto insurance coverage and health insurance coverage, as a result of the switch from a no-fault to tort-based insurance system.

NAMIC will provide regular updates as to the status of these two legislative studies.

Direct questions to NAMIC State Affairs Manager Christian Rataj.

Posted: Monday, June 20, 2005 12:00:00 AM. Modified: Monday, June 20, 2005 3:25:58 PM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.