More on Utah Commercial Health Insurance Complaints

The total number of complaints declined steadily from 1999 to 2003, remained relatively constant during 2004 and 2005, and declined again in 2006 and 2007. The number of justified complaints has remained relatively stable from 1999 to 2006, except for 2001, where the number of justified complaints was much higher than the trend, and 2007, where the number of justified complaints declined significantly compared to previous years. The number of unjustified complaints has also remained fairly constant over time, but also declined slightly during 2007. The most significant change over time has been in the number of question of fact complaints, which have declined significantly since 1999. This trend towards fewer complaints is primarily due to an active effort by OCHA staff and the Utah health insurance industry to resolve consumer concerns before they rise to the level of a formal written complaint. This is a positive trend for the industry.

In addition to tracking the number of written complaints and how they are resolved, the Insurance Department also tracks the reason for the complaint. On average, more than sixty percent of all consumer complaints are due to claim handing issues, while policyholder services and marketing & sales issues account for the remainder.

Complaint ratios. Another measure of complaint activity is the complaint ratio. A complaint ratio is a measure of how many consumer complaints were received compared to the amount of business a commercial health insurer did in the state. Each complaint ratio reports the number of complaints per $1,000,000 in total direct earned premium. For example, a ratio of 1 means the insurer had 1 complaint for every $1,000,000 in premium.

As discussed previously, the Insurance Department has seen a decline in the total number of complaints from 1999 to 2003, remaining fairly constant during 2004 and 2005, and declined again in 2006 and 2007. This is primarily due to a decline in the number of question of fact complaints as part of a concerted effort by OCHA staff and the Utah health insurance industry to reduce the number of these kinds of complaints.

However, the number of justified and unjustified complaints has remained fairly constant, and this should be taken into account when looking at the pattern of the complaint ratios. Yhe average complaint ratio for the commercial market is about 0.07 for all complaints, and about 0.02 for each complaint type. Using this average as a benchmark, the complaint ratios for 2007 are lower than their nine-year average.

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