It’s been nearly a year since two major health insurance reform laws went into effect in Colorado: One requires gender equality for premiums, and the other requires maternity coverage on all individual policies issued in Colorado (group plans already required maternity coverage). In addition, several aspects of the ACA have been in effect on a national level for more than a year now (no lifetime limits on policy benefits, relatively high minimum annual limits, young adults allowed to stay on their parents’ policy until age 26, and guaranteed-issue coverage for children under the age of 19 for any policy that is offered to that age group).
Premiums in Colorado were an average of 12.9% higher this year than they were in 2010, despite the Division of Insurance’s increased scrutiny on rate increase filings from health insurance carriers. Although 12.9% is very much in line with the average rate increases that we saw every year over the last decade, there were plenty of fingers pointing at health care reform (particularly the Colorado law requiring maternity coverage on all policies) as the reason for the 12.9% increase in premiums this year. The Division of Insurance released a detailed report explaining that health care reform accounted for a tiny fraction of the 2011 rate hikes, but the rumors persisted anyway.
Just to clarify, I am in no way saying that double digit health insurance premium hikes are ok. Nobody’s income increases like that year after year, and especially given the state of the economy over the last few years, these never-ending rate increases are making health insurance less and less affordable. But as long as healthcare costs continue to increase, health insurance premiums will follow suit.
With all of that background, I was pleased to see reports that premiums in Colorado will rise by an average of 9.4% in 2012. Don’t get me wrong… that’s still an unsustainable number if it were to continue for years into the future. We obviously have a long way to go towards getting healthcare costs under control, and it’s crazy that we use the word “only” when we see a 9.4% annual increase. But the average increase for 2012 is the lowest the state has seen since 2000. I’m sure there will still be people who falsely claim that Colorado’s maternity mandate and federal reform are the reason for any increase. But when we place the 2012 increase in context with the increases we’ve seen over the past decade, it becomes harder to blame recent reform laws for the 2012 premium increases. I’m glad to see that after a year of having guaranteed issue coverage for children, no lifetime maximums, more comprehensive preventive care, and maternity benefits on all new and renewed individual policies, we are seeing the lowest average rate increase in over a decade.