Shared health care departments in Colorado are now required to report their operations to the state under new regulations signed into law by Governor Jared Polis on Wednesday.
House Bill 1269 requires shared health care departments and other non-insurance entities that cover medical costs to submit annual reports to the state, including how many members they have and how many of money members pay compared to the amount of medical bills that the entities cover. The first reports are due October 1, with subsequent annual deadlines falling in March.
Shared health care ministries have grown in popularity in recent years, with proponents describing them as cheaper alternatives to insurance and opponents calling them scams. Also called faith-based health care, nonprofits share health care costs among a group of people who are usually part of the same church or religion. Members often pay monthly dues to the ministry, and when one of the members receives a medical bill, the ministry can use the money collected to cover the costs. They do not constitute insurance and do not guarantee the payment of medical expenses.
“Currently, very little information is known about these arrangements,” said the bill’s sponsor, Rep. Susan Lontine, D-Denver, adding that many people don’t recognize the “financial risk” involved with the membership in such entities. “People need to know why it’s cheaper and how it might affect them in the long run.”
Departments say they can reject medical bills for a number of reasons, including moral objections to medical problems resulting from premarital sex, smoking, alcohol consumption or obesity. They are also not required to cover essential care and may decline coverage due to pre-existing conditions or religious beliefs.
Supporters of the bill said the state must take steps to monitor shared health care departments, pointing to a lawsuit filed against Trinity Healthshare where members claimed the department refused to cover bills ranging from health checkups to life-saving surgeries. The Colorado Consumer Health Initiative said it has received dozens of complaints from members of shared health care departments who refuse to pay their medical bills, ranging from $250,000 in emergency surgeries to cancer treatments to routine medical visits.
Opponents have defended the ministries, describing them as a less expensive, belief-driven, community-driven way to meet medical expenses. Critics of the bill said the state Insurance Division was the wrong entity to oversee the departments, calling the agency anti-competition.
The bill passed the legislature almost entirely along party lines, with Democrats in support and Republicans in opposition. Rep. Marc Snyder, D-Colorado Springs, was the only lawmaker to vote outside his party, opposing the bill.
“The insurance commissioner is looking for a way to access this thing that isn’t insurance,” said Sen. Rob Woodward, R-Loveland, while voting against the bill. “Not only are they trying to collect the data from them, but they’re also trying to put in fees and costs that will literally put a lot of them out of business.”
Under the bill, the Division of Insurance will have the power to fine healthcare sharing departments or issue cease-and-desist orders if they fail to comply with the new requirements. in terms of reporting. Fines could be up to $5,000 per day, after a 30-day grace period during which the department would be notified that it was non-compliant.
In Colorado, between 50,000 and 60,000 people use health care sharing departments, estimates the Colorado Consumer Health Initiative. However, the state doesn’t actually know how many shared health care ministries there are in Colorado or how they operate, including how much of their members’ money is actually used to pay medical bills.
Shared healthcare ministries have experienced a membership boom thanks, in part, to rising unemployment during the COVID-19 pandemic, resulting in the loss of employer-provided insurance . In 2010, less than 200,000 people were part of shared health care ministries. Today, about 1.5 million people are members, according to the Alliance of Health Care Sharing Ministries.