We mentioned last week that the Colorado Division of Insurance had not yet approved rates past 9/23 for several carriers, and unfortunately, that is still the situation. For carriers that allow any effective date, quotes can still be generated for 9/22, but carriers that only allow 1st and 15th of the month effective dates are unable to quote new policies now (and have been since 9/15) if their rates have not been approved. This is causing a bit of a traffic jam for people who are searching for a new individual health insurance policy right now. If you’re looking for a 10/1 effective date, the options are relatively limited for the time being. You can choose to get quotes and apply for one of the policies that has had its rates approved, but there are currently a lot fewer policies available on the comparison than normal because so many are still waiting for rate approval. Another option is to apply for a short term policy to cover the month of October and wait until the rates are available for all carriers before applying for a policy with an 11/1 effective date. You can also just wait until the DOI completes their review and then apply for a policy with a 10/1 effective date, although when applying so close to the effective date, application approvals/denials often don’t happen until after the requested effective dates have passed.
There are a lot of factors involved in the slow approval from the DOI. The months-long review of Anthem Blue Cross Blue Shield’s 2010 rates finally came to a close last week when Anthem agreed to refund $20 million to about 90,000 insureds, but no action was taken against the company by the DOI, and the current 2010 rates were allowed to remain unchanged (this is a settlement to end the review, and involves no admission of wrongdoing by Anthem). When those rates were first submitted to the DOI last fall, they were quickly reviewed and approved, and the DOI is likely looking to avoid a repeat scenario in the future. Rather than rapidly approving all the rate proposals that come in from the carriers and then possibly having to review everything months later, the DOI is doing a much more thorough job this year. In addition, Colorado got $1 million in federal money to review rate filings, and can use that money to hire additional analysts and actuaries to review data submitted by the insurance carriers.
Another issue is that the rates that have been submitted to the DOI for approval are all over the board, but include some pretty steep increases from some carriers. The DOI is likely trying to make very sure that those rates – especially the increases on the higher end of the spectrum – are truly justified before approving them, in order to avoid a repeat of this year’s protracted re-analysis of rates. It’s unfortunate that the rate review process is taking so long and making it difficult for people who are currently shopping for individual health insurance. But hopefully the DOI’s diligence on this issue now will mean that consumers and carriers will all be confident that the new rates are justified and fair as we move forward.