Making Health Insurance Affordable

What is Colorado doing to make health insurance more affordable?

Because health care costs drive insurance rates, health care costs affect any effort to improve affordability and accessibility of insurance. The changes to the rate review process are part of a larger effort by Colorado to address the rising cost of health care. House Bill 08-1389 (which became law in 2008) includes many other steps to lay the foundation for meaningful health reform in Colorado, including giving consumers the tools to make better health care decisions and requiring transparency and accountability of health care dollars. Major changes to health care are occurring at the federal level. National health reform is intended to have a significant impact on how health insurance is structured in Colorado and other states. As part of Federal Patient Protection and Affordable Care Act (ACA), the Federal Health Care Reform effort has also provided a $1 million grant to Colorado to enhance the premium rate review process and consumer education and outreach. This will allow the Division to make the rate review process more transparent and accessible for consumers.

Why do rates continue to increase in double digits?

Rates are driven by medical spending, which is growing because of many factors including increased use of health care services, new technologies, prescription drugs, an aging population, and unhealthy lifestyles. Rate changes can vary depending on a company's financial situation and whether its existing premiums cover its projected claims and administrative costs.

Are Colorado health insurance companies profitable?

Most of Colorado's large insurers are for-profit organizations. During a five-year period ending in 2008, the average net income for the ten largest health insurers in Colorado was 4.6 percent. The "income" is the remainder after the company has paid its expenses and covered losses. It can be used as profit, for financial reserves, to expand services, or to build surplus.