In May 2022, Colorado enacted a law related to prescription drug coverage in the state. The legislation directs health insurers to maximize the use of manufacturer rebates to reduce member cost-sharing at the point-of-sale (POS), to the extent that it will not increase premiums, starting in 2024. The Colorado Division of Insurance recently hired Milliman to complete an actuarial study analyzing the effects of POS rebates on customers in Colorado’s individual health insurance market. This report summarizes the results, focusing on the impact of POS rebates on premium and actuarial value.

This report was commissioned by the Colorado Division of Insurance.