Colorado takes aim at health care sharing plans

DENVER – For a number of years, the Colorado Division of Insurance has received many complaints and questions about health care sharing plans and arrangements in that state, although the division had limited information to address these concerns.

Now the DOI has issued its first annual report on health care sharing plans and arrangements in Colorado. The report is a result of 2022 legislation, NB2201269, which requires NCSAs operating in Colorado to report data annual to the DOI. This first report focuses on 2021 data.

Colorado is only the second state to require collecting information on HCSAs. Massachusetts began requiring HCSAs to provide information in 2022. In a news release, the Colorado DOI said this “represents a new avenue for consumer protection and transparency for the DOI, which is important as the Division has deep concerns about HCSAs in light of the complaints it has received from consumers.”

Colorado Insurance Commissioner Michael Conway said the consumer complaints his department receives are “typically centered around an HCSA not paying for a health care service, leaving the person stuck with a bill for thousands of dollars, are not just heartbreaking, but frustrating. It shows me that people are clearly not getting the full story from the companies when they sign up for HCSAs. This reporting will help to shed light on HCSAs, and it becomes another tool in our consumer protection toolbox.”

“This report is a first step in finding out more about HCSAs and how they work,” said Leilani Russell, DOI project manager for health initiatives and implementation. “That means we can help Colorado consumers to know what they are getting, and more importantly, what they aren’t getting, when they look at HCSAs.”

The report said more than 67,800 Colorado residents are members of HCSAs. This represents about 4% of those who are enrolled in an HCSA nationwide. In 2021, HCSAs collected $97 million from Colorado members while paying $131 million out of $362 million in health care claims submitted.

HCSAs do not offer the same protections and benefits as Affordable Care Act plans. Many of the HCSAs reported excluding benefits such as contraception coverage, mental health services, alcohol use disorder treatments, ADHD treatments, prescription drugs for chronic conditions, comprehensive reproductive health coverage (in most cases including coverage for abortion), and some pre-existing conditions.

Additionally, there are no guarantees that HCSA members will have their health care costs paid for through the “sharing” provisions in the groups. Some HCSAs specifically state that members are personally liable for payment of their medical bills.

The Colorado report said some NCSAs require that members first request health care providers and hospitals to reduce or write off health care bills. Other HCSAs actually require members, after members have paid HCSAs for coverage, to first request charity care and financial support from local governments and consumer support organizations in paying the member’s health care bills. For members who also have Medicare, HCSAs often require that members only use the HCSA after health care costs are submitted to Medicare.

DOI said that based on the consumer complaints it receives, “it appears that consumers do not fully understand these limiting provisions, and that consumers often don’t understand what they are signing up for when they sign up for a HCSA. Typically, most of the consumers contacting the DOI believe they have something that works like a full ACA health insurance plan, with benefits to cover their health needs, and all of the protections that are part of such plans.”