May 1, 2023

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Protecting Coloradans from insolvent insurers

by | May 1, 2023

On Tuesday, April 25, 2023, Katie Wallat, CCLP’s Interim Director of Administrative Advocacy, provided testimony (written by Bethany Pray, CCLP’s Interim Executive Director) to the House Public & Behavioral Health & Human Services Committee for House Bill 23-1303, Protect Against Insurers’ Impairement and Insolvency. CCLP is in support of HB23-1303.


Thank you, Madame Chair and Members of the Committee, 

My name is Katie Wallat, and I am an attorney at the Colorado Center on Law and Policy. CCLP is a nonprofit, nonpartisan advocacy organization that works to advance the health and well-being of Coloradans facing economic insecurity. CCLP strongly supports House Bill 23-1303, Protect Against Insurers’ Impairment and Insolvency, with the amendments that are to be introduced by the sponsor. 

CCLP supports the goals of the legislation, which are pragmatic, fair and necessary. This legislation, based on the Model Act created by the National Association of Insurance Commissioners, primarily aims to ensure that covered claims arising from the insolvency of insurers can be resolved in a timely manner.  

While Colorado has had a robust private insurance market over the past several years, it is incumbent upon the state to be prepared to manage potential insolvencies and reduce impacts on both providers and carriers. The Model Act, adopted now in the majority of states, reforms the guaranty fund mechanism in two important ways. First, the bill brings Health Maintenance Organizations (HMOs) into the guaranty fund, relying on HMOs to contribute to the fund when an insolvency occurs and supporting HMOs if they face an insolvency. Second, this bill helps to better distribute the impact of any future long-term care insolvency, more equitably sharing the burden between health insurance and life insurance entities.  

And the bill adds an additional innovation to those provided by the Model Act language. By supporting the goals of the federal risk adjustment program, it ensures that those carriers that take on higher-risk populations and incur greater expenses, can rely on scheduled payments from insurers with lower-risk populations. Without that innovation, carriers would be less able to count on those payments that allow them to serve sicker populations – including people with chronic health needs, and those whose health has been impacted by the environmental, nutritional, and psychological tolls of poverty, and other social determinants of health. 

These changes simply can’t happen soon enough. The Friday Health Plans have already become insolvent in Texas and have begun layoffs in the Alamosa area. Were Friday, with its substantial footprint in rural Colorado, to be declared insolvent here, it would put rural providers at risk of nonpayment – at a moment when that vital part of the rural fabric is already facing financial difficulties. In a report by the Center for Healthcare Quality Payment Reform, authors found that 16 rural hospitals have had to cut services and 7 were at risk of closure in Colorado. A second insurer, Bright Health, is “staring down bankruptcy” by some accounts and Colorado must be prepared for the possibility of that insolvency as well. 

This legislation, based on an act that is already law in most states, is urgent and essential to the health of the insurance market and the providers who depend on the stability of that market for reimbursement. We ask for your strong support today. Thank you.


HB23-1303 was signed into law on May 15, 2023.

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To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.


Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.


Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.


Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.