First-day Colorado legislative bills target health exchange, construction defects reform

The bills — all of which were introduced in the Republican-majority Senate — set the tone for discussions around the 120-day session. They are likely to be joined later by more bills regarding affordable housing, as well as by legislation to increase transportation funding, the one topic that wasn’t touched in the raft of first-day submissions.

Initially, the proposal generating the most discussion is Senate Bill 3, sponsored by Sen. Jim Smallwood, R-Parker, which would repeal the four-year-old Connect for Health Colorado exchange that allows state residents and small business to purchase private health insurance from a variety of options, often at subsidized prices. Smallwood’s abolish the exchange at the end of last year.

Created in 2011 after a business-led coalition pushed the exchange bill through the Republican-held House, the insurance marketplace provides coverage to roughly 158,000 people but also has shed insurers in recent years and seen prices rise annually, including a 20 percent increase in average premium prices from 2016 to 2017.

At a pre-session news conference, new Senate President Kevin Grantham, R-Cañon City, called the exchange a “failure” and said changes were needed to it as part of a broader system of efficiencies needed for Colorado health care.

Smallwood, an insurance broker who was elected in November and immediately appointed chairman of the Senate Health and Human Services Committee, said Wednesday that he decided to try to repeal, rather than fix, the exchange, because he believes that current customers can transition seamlessly to the federally operated exchange, HealthCare.Gov, in 2019 and can save state residents money in the process.

After watching insurers such as UnitedHealthCare and Humana Insurance exit the exchange and leave residents of many counties with just one or two options, he said that Coloradans who subsidize the exchange with a monthly fee on their premiums deserve a break and that Coloradans can get subsidies on the federal exchange still.

“I don’t think that it is as big a step as people think,” Smallwood said of the bill. “Tons of states use the federal government’s exchange ... We owe it to the citizens of Colorado to determine whether the tens of millions of taxpayer dollars that fund that exchange are worth it given the number of changes that have happened.”

Senate Democratic leaders immediately said they would fight Smallwood’s effort, however. Minority Leader Lucia Guzman, D-Denver, said that too many people depend on the exchange for affordable health insurance and that she will oppose any efforts that could put their existing insurance situations in jeopardy.

“We have work to do on our health care progress,” Guzman said.

Similarly, Sen. Matt Jones, D-Louisville, said he is worried about SB 1, sponsored by Sen. Tim Neville, R-Littleton, which would require that state agencies allow some businesses to correct violations of rules that don’t affect public health or safety before they are fined for them. Grantham said that the bill is an effort to “slow the relentless production of new rules, which average 530 per year and account for 15,000 pages per year.”

Jones, however, said that rolling back regulations at a time when other states are struggling with the outcomes of blatant rules violations — he referenced the scourge of lead in drinking water in Flint, Michigan — is not good for the public safety.

“One person’s regulation is another person’s safeguard and protection,” Jones said.

One major bill introduced Wednesday that appears to have at least some bipartisan backing is SB 45 — sponsored by Grantham and Sen. Angela Williams, D-Denver — seeks to reduce the cost of insurance for condominium builders.

Cutting those costs, backers believe, will spur more development of affordable condominiums and create more housing for young professionals. Builders now say they are scared of how easy it is to file class-action lawsuits over purported condominium defects, and condos make up less than 5 percent of the new housing stock in the Denver metro area.

SB 45 would allow insurers to go to court to apportion defense costs equitably among liability insurers who are required to defend a defect claim through an expedited process. It could be the first of a number of bills addressing construction-defects reform.

“By targeting insurance rates, we’re addressing the problem without reducing consumers’ right to protect the property that they spent their life’s savings to buy,” said House Speaker Crisanta Duran, D-Denver, a co-sponsor of the measure in her chamber.

Added Assistant House Minority Leader Cole Wist, R-Centennial, who is the House co-sponsor with Duran: “This is the first step in a multi-tier process to help Coloradans attain a home of their own, and I am pleased to be a part of this critical legislation.”

Ed Sealover covers government, health care, tourism, airlines, hospitality, restaurants and brewing for the Denver Business Journal. Phone: 303-803-9229.