The Colorado House Health and Insurance Committee advanced Senate Bill 93 to the committee of the whole on Tuesday.
The measure would lower the state’s interest rates on medical debt from 8% to 3% and require debt collection agencies to provide consumers an itemized statement on the medical charges in question.
The bill’s sponsors say the measure is intended to protect consumers from high medical costs and the crippling medical debt they often create.
“As healthcare costs have risen, deductibles and out-of-pocket costs on health insurance plans have risen and health insurance companies are passing along these costs to consumers,” said bill co-sponsor Rep. Kyle Brown (D-Louisville). “Typical health insurance plans on Connect for Health Colorado can have deductibles ranging from $5-7,000 or more before coverage fully kicks in, and out-of-pocket maximums can be more than $9,000.”
Brown cited data that showed more than 12% of Coloradans have medical debt in collections, of whom 37% were unable to pay for basic necessities, 15.7% took out loans, and 5.4% declared bankruptcy.
The bill’s sponsors emphasized that medical debt is oftentimes unclear and can negatively impact both insured and uninsured alike, disproportionately affecting communities of color, younger households, veterans, and those with lower post-secondary education.
“We try to take acknowledgment of the reality that there can be uncertainties, that there are appeals processes, that there are contests and questions of what insurance will or won’t cover,” said bill co-sponsor Rep. Mike Weissman (D-Aurora). “So we tried to set forth some guardrails around payment plans here and also create some requirements for collectors to refrain from pursuing collection actions or reporting to a consumer reporting agency during the pendency of some kind of appeal.”
The bill also includes medical debt-related consumer protections against disincentivizing self-pay cost options, surprise billing, and damages to credit score ratings.