Colorado’s Health Care Future Statement on Division of Insurance Announcement that Friday Health is Insolvent

Jul 21, 2023

DENVER, July 18, 2023 — Colorado’s Health Care Future issued the following statement today after the Division of Insurance (DOI) announced that Friday Health Plans is insolvent:

“Barely six months since Bright Health exited Colorado, DOI announced yet another health insurer insolvency under its watch with the termination of Friday Health. In both cases, regulators approved underpriced health plan products in hopes that artificially low premiums would fuel growth for the startup insurers and disrupt Colorado’s health system for the better. Simply put, this experiment failed.

“As a result, over 35,000 Coloradans now face uncertainty with their health coverage and access to care, while care providers throughout the state are left wondering if they will ever be paid for the care they have already delivered to Friday Health members. Furthermore, Coloradans are likely to face even higher health plan premiums in coming years if Colorado insurers are forced to absorb the tens of millions of dollars in losses left behind by these insolvencies. 

“Instead of a course correction, DOI remains full steam ahead on the Colorado Option law — yet another experiment to create a new government-controlled health insurance system with artificially low premiums. The law’s arbitrary premium reduction mandates and government price controls ultimately threaten patients’ access to affordable, high-quality care as Colorado health insurers and care providers face significantly increased administrative costs and financial risks. 

“Adequate, actuarially sound health plan premiums are the foundation for stable, statewide, non-politicized health insurance coverage that empowers care providers with the resources required to deliver high-quality patient care. Yet the DOI continues to prioritize state government mandates, price controls, and political pressure over reasonable rate oversight based on actuarial data.

“These trends cast further doubt on DOI’s competency to maintain a stable and functioning health insurance marketplace, as well as its ability to put Coloradans in control of their health care instead of a government-controlled Public Option. Since the Colorado Option law took effect at the beginning of 2023, Colorado’s health insurance market has become significantly consolidated with fewer options for Coloradans, and none of the affordability that was promised has been realized. It’s time to get back to what was working before the Colorado Option law was passed—when Colorado had the fourth lowest premiums in the country and a flourishing health insurance marketplace.” 

Additional background information:

  • Since the conclusion of the 2022 plan year, four carriers have exited the individual market, small group market, or both markets, with the potential for more to follow.

  • Denver Health Medical Plan was the only issuer to meet the Colorado Option premium reduction requirement for all of its plans. However, it did so by pricing their Colorado Option plans at an unsustainable loss according to their own actuaries.

  • Despite the Bright Health and Friday Health insolvencies, the DOI is again considering aggressively low premiums to support Denver Health’s desired expansion of underpriced Colorado Option plans—in partnership with the Polis Administration-supported PEAK Health Alliance—into nine rural western counties, even though Denver Health’s own actuaries cited the financial risks of inadequate premiums in the insurer’s 2023 rate filings.

  • Denver Health has recently required a $5 million state government bailout, significant charitable contributions, and preferential treatment in recent legislative reforms to address financial challenges.

Read more about Colorado’s Health Care Future here.