The Colorado Division of Insurance issued a press release on Monday, addressing the fact that health insurance premiums in Colorado are continuing to increase. They reiterated some numbers from earlier this fall, noting that less than 5% of the overall rate increases for next year can be attributed to changes implemented by federal health care reform. The vast majority of the rate hikes that insureds will see in 2011 are due to factors that have been driving health insurance premiums for years, long before federal reform became an issue. As long as the cost of health care continues to rise, the cost of health insurance will rise along with it.
The Division of Insurance press release notes that in the individual market in Colorado, rates from the ten largest carriers will increase by an average of 12.9% in 2011 when compared with 2010 rates. Of course that’s just an average, and actual rate increases will vary dramatically from one carrier to another, and from one policy to another.
The Division of Insurance is taking a much more active role in reviewing health insurance premium hikes than they were able to in the past, thanks in large part to additional funding provided by federal health care reform legislation. Although double digit rate increases are never popular, there’s not really a way around them as long as our health care costs continue to climb at their current pace, and the DOI is making sure that rate increases are justified. The 12.9% average rate increase comes even though health insurance carriers will be complying with the new medical loss ratio rules as of January 1. Health insurance admin costs have been reduced, but premiums continue to climb sharply. Obviously the issue of cost needs to be addressed across the rest of the health care industry too.