Uninsured Coloradans to Receive Lower Hospital Rates

Last week, Colorado Governor John Hickenlooper signed a bill establishing the Hospital Payment Assistance Program, which aims to make hospital bills more affordable for uninsured residents who do not qualify for Medicaid. This group of people is often at risk of receiving the highest hospital bills since they receive rates greater than those paid by insurance companies, which negotiate prices with the hospitals. Without that power of negotiation, uninsured patients are often left paying the full “sticker price,” for services, which can go up to as much as 495 percent of cost for inpatient services and 842 percent of cost for outpatient services. Those with the least ability to pay end up paying the highest rates.

Senator Irene Aguilar, who is an internal medicine doctor in addition to a legislator, sponsored the bill, recognizing the devastating financial impact that one medical episode can have on the rest of an uninsured person’s life based on the current system. She stated, “The goal of [the program] is to provide a way for hard-working uninsured Coloradans to responsibly pay a fair price for their medical care…so that they don’t endanger their health and livelihood out of fear of bankruptcy.” Proponents for the bill included the Colorado Consumer Health Initiative, which represents over 500,000 consumer members.

The bill does not apply to outpatient providers such as clinics and physician offices, and it will only apply to medically necessary services. Those covered are limited to patients whose family’s income does not exceed 250 percent of the federal poverty level (currently $57,000 for a family of four) and who do not have insurance coverage. Patients must not qualify for Colorado Indigent Care Program (CICP) coverage.

The major provisions of the bill provide the following protections to eligible consumers:

  • Transparency of hospitals’ charity and financial assistance programs. These policies will be required to be posted in waiting rooms, on the hospitals’ websites, on billing statements, and directly to the patients before they are discharged.
  • Capped prices. An uninsured patient cannot be charged more than the lowest price the hospital has negotiated with insurance companies or other third parties for the same service.
  • Extended payment plans. Before sending a patient’s account to a collection agency, the hospital must make an attempt to set up an extended payment plan.

The law is scheduled to take effect this August and will not be enforced by a specific government agency. Members of the Colorado Hospital Association (CHA) will be trained by the organization before the effective date, according to the CHA.