State health insurance review: Reforms account for 5 percent of higher premiums in Colorado

Only about 5 percent of higher health insurance premiums in Colorado is attributed to federal health care reforms, according to the results of a review conducted by the state Division of Insurance.

Rather, a variety of factors contribute to higher premiums, among them more visits to doctors, more and more expensive tests and an aging and less healthy population.

“It’s a hot issue for many people, and we figured the best way to address the rumors was to publish the facts so people could see for themselves what is driving the price of health insurance,” said  Colorado Insurance Commissioner Marcy Morrison.

The division reviews rates submitted by health insurance carriers. Although carriers may submit their rates for approval at any time during the year, the fall months are a peak time because of the number of policies with Jan. 1 renewal dates. More than 90 companies sold some type of major medical health coverage in Colorado in 2009. Each company may sell a number of different insurance products, each of which requires a separate rate filing and review.

Morrison said she had heard from many people who believed the Patient Protection and Affordable Care Act, some provisions of which went into effect Sept. 23, were the chief cause of increased premiums. Morrison said she directed rate analysts and actuaries to look carefully for factors in health premium increases and document them.

“What we found isn’t surprising: Health insurance premiums continue to rise,” Morrison said. “But what may be eye opening for some people is that federal health reforms have contributed from

0 (percent) to a maximum of 5 percent of those increases. It’s not the primary cause for increasing rates.”

While medical advances are a contributing factor, the companies who are providing health benefits are also filing higher rates for a number of reasons unrelated to the use of medical services.

“We see companies who use aggressive pricing at one point to be competitive, but they will adjust premiums in future filings to increase their profits the following year,” Morrison said.

“There needs to be a balance between what companies charge and what the public can afford in order to buy health coverage,” she added. “And there are inefficiencies that need to be corrected. Government programs, as well as the private sector, need to look at their operations and make improvements to keep costs down.”