Comparing Health Insurance Rates

How do Colorado's health insurance rates compare to other states?

Premium rates are going up across the country. In 2009, Colorado ranked 26th among states in the annual amount paid by a family for health insurance premiums involving employers of all sizes, according to the federal government's Medical Expenditure Panel Survey (MEPS). That means families in 25 states paid higher average premiums than in Colorado.

The average annual premium for a Colorado family getting coverage through an employer was $13,360 in 2009, compared to $9,522 five years earlier. The average annual premium for a single employee was $4,570 in 2008, compared to $3,645 five years earlier.

Unlike some states where consumers have few options, Colorado has a competitive health insurance market. There are currently 392 companies that sell one or more of the different types of health insurance coverage, so Colorado consumers have many choices of companies and plans. The top ten carriers account for about 72.3 percent of the market.

Colorado also has a number of protections for consumers who buy individual insurance plans. Individual health benefit plans, as defined in Colorado law, also are "guaranteed renewable," meaning these types of policies cannot be cancelled due to the health condition or claims of the person insured. However, premium rates for the whole market continue to rise as the cost of medical services goes up.

What are important factors that the Division of Insurance looks at in reviewing rates?

The Division of Insurance has the authority to review rates to ensure the rates are not excessive, inadequate or unfairly discriminatory.

Excessive Rates - are rates that produce a long run profit that is unreasonably high for the insurance coverage being provided or where the expenses are unreasonably high for the coverage being provided. Insurance policies that are costly and provide little benefit to consumers or provide high profits to insurance companies could be considered to have excessive rates.

Inadequate Rates - are rates that are clearly so low that it cannot pay projected claims and/or expenses, or low rates intended on creating a monopoly. It is important that we have financially solvent companies that can pay the benefits they promised in an insurance policy.

Unfairly Discriminatory Rate - is charging different rates for the same benefits provided to individuals who have the same expectations of loss or when, after allowing for practical limitations, the rates do not appear to be equitable. Unfairly discriminatory rates result in some consumers paying excessive rates and other consumers paying inadequate rates.